EXECUTION COPY
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,
DEPOSITOR
JPMORGAN CHASE BANK,
TRUSTEE
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
MASTER SERVICER AND SECURITIES ADMINISTRATOR
and
EMC MORTGAGE CORPORATION,
SELLER
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2004
Structured Asset Mortgage Investments II Inc.
Bear Xxxxxxx ALT-A Trust 2004-10, Mortgage Pass-Through Certificates
Series 2004-10
iv
ARTICLE I
Definitions
ARTICLE II
Conveyance of Mortgage Loans; Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee......................46
Section 2.02 Acceptance of Mortgage Loans by Trustee......................48
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement....................................................50
Section 2.04 Substitution of Mortgage Loans...............................51
Section 2.05 Issuance of Certificates.....................................52
Section 2.06 Representations and Warranties Concerning the Depositor......53
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer..............................................55
Section 3.02 REMIC-Related Covenants......................................56
Section 3.03 Monitoring of Servicers......................................56
Section 3.04 Fidelity Bond................................................57
Section 3.05 Power to Act; Procedures.....................................57
Section 3.06 Due-on-Sale Clauses; Assumption Agreements...................58
Section 3.07 Release of Mortgage Files....................................58
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee..............................59
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.......60
Section 3.10 Presentment of Claims and Collection of Proceeds.............60
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.......61
Section 3.12 Trustee to Retain Possession of Certain Insurance
Policies and Documents.......................................61
Section 3.13 Realization Upon Defaulted Mortgage Loans....................62
Section 3.14 Compensation for the Master Servicer.........................62
Section 3.15 REO Property.................................................62
Section 3.16 Annual Officer's Certificate as to Compliance................63
Section 3.17 Annual Independent Accountant's Servicing Report.............63
Section 3.18 Reports Filed with Securities and Exchange Commission........64
Section 3.19 EMC..........................................................65
Section 3.20 UCC..........................................................65
Section 3.21 Optional Purchase of Defaulted Mortgage Loans................65
ARTICLE IV
Accounts
Section 4.01 Protected Accounts...........................................66
Section 4.02 Master Servicer Collection Account...........................67
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account..................................68
Section 4.04 Distribution Account.........................................69
Section 4.05 Permitted Withdrawals and Transfers from the
Distribution Account.........................................69
Section 4.06 Reserve Fund.................................................71
Section 4.07 Class XP Reserve Account.....................................72
ARTICLE V
Certificates
Section 5.01 Certificates.................................................73
Section 5.02 Registration of Transfer and Exchange of Certificates........80
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates............84
Section 5.04 Persons Deemed Owners........................................84
Section 5.05 Transfer Restrictions on Residual Certificates...............84
Section 5.06 Restrictions on Transferability of Certificates..............85
Section 5.07 ERISA Restrictions...........................................86
Section 5.08 Rule 144A Information........................................87
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates............................88
Section 6.02 Allocation of Losses.........................................92
Section 6.03 Payments.....................................................92
Section 6.04 Statements to Certificateholders.............................92
Section 6.05 Monthly Advances.............................................95
Section 6.06 Compensating Interest Payments...............................95
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer...........................96
Section 7.02 Merger or Consolidation of the Master Servicer...............96
Section 7.03 Indemnification of the Trustee, the Master Servicer and
the Securities Administrator.................................96
Section 7.04 Limitations on Liability of the Master Servicer and
Others.......................................................97
Section 7.05 Master Servicer Not to Resign................................98
Section 7.06 Successor Master Servicer....................................98
Section 7.07 Sale and Assignment of Master Servicing......................98
ARTICLE VIII
Default
Section 8.01 Events of Default...........................................100
Section 8.02 Trustee to Act; Appointment of Successor....................102
Section 8.03 Notification to Certificateholders..........................102
Section 8.04 Waiver of Defaults..........................................103
Section 8.05 List of Certificateholders..................................103
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee...........................................104
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator...............................................106
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans..............................107
Section 9.04 Trustee and Securities Administrator May Own Certificates...108
Section 9.05 Trustee's and Securities Administrator's Fees and
Expenses....................................................108
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator...............................................109
Section 9.07 Insurance...................................................109
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator...............................................109
Section 9.09 Successor Trustee and Successor Securities Administrator....110
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator...............................................111
Section 9.11 Appointment of Co-Trustee or Separate Trustee...............111
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration....................112
ARTICLE X
Termination
Xxxxxxx 00.00 Xxxxxxxxxxx Xxxx Xxxxxxxxxx by EMC or its Designee or
Liquidation of the Mortgage Loans...........................115
Section 10.02 Additional Termination Requirements.........................117
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties...........................................119
Section 11.02 Amendment...................................................119
Section 11.03 Recordation of Agreement....................................120
Section 11.04 Limitation on Rights of Certificateholders..................120
Section 11.05 Acts of Certificateholders..................................121
Section 11.06 Governing Law...............................................122
Section 11.07 Notices.....................................................122
Section 11.08 Severability of Provisions..................................123
Section 11.09 Successors and Assigns......................................123
Section 11.10 Article and Section Headings................................123
Section 11.11 Counterparts................................................123
Section 11.12 Notice to Rating Agencies...................................123
v
APPENDIX
Appendix 1 - Calculation of REMIC I Y Principal Reduction Amounts
EXHIBITS
Exhibit A-1 - Form of Class I-A Certificates
Exhibit A-2 - Form of Class II-A Certificates
Exhibit A-3 - Form of Class M Certificates
Exhibit A-4 - Form of Class B Certificates
Exhibit A-5 - Form of Class R Certificates
Exhibit A-6 - Form of Class B-IO Certificates
Exhibit A-7 - Form of Class XP Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - Reserved
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit F-3 - Form of Transferor Representation Letter
Exhibit G - Form of Custodial Agreement
Exhibit H-1 - Countrywide Servicing Agreement
Exhibit X-0 - XXX Xxxxxxxxx Xxxxxxxxx
Xxxxxxx X-0 - XxxxxXxxxx Servicing Agreement
Exhibit H-4 - SouthTrust Servicing Agreement
Exhibit H-5 - Xxxxx Fargo Servicing Agreement
Exhibit I - Assignment Agreements
Exhibit J - Mortgage Loan Purchase Agreement
Exhibit K - Form of Trustee Limited Power of Attorney
54
POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of August 1, 2004, among
Structured Asset Mortgage Investments II Inc., a Delaware corporation, as
seller (the "Depositor"), JPMorgan Chase Bank, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Trustee"), Xxxxx Fargo Bank, National Association, as master servicer (in
such capacity, the "Master Servicer") and as securities administrator (in
such capacity, the "Securities Administrator") and EMC Mortgage Corporation
("EMC").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor acquired the Mortgage
Loans from EMC. On the Closing Date, the Depositor will sell the Mortgage
Loans and certain other property to the Trust Fund and receive in
consideration therefor, Certificates evidencing the entire beneficial
ownership interest in the Trust Fund.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as
a REMIC. On the Startup Day, the REMIC I Regular Interests will be designated
"regular interests" in such REMIC and the Class R-I Certificate will be
designated the sole class of "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the REMIC
I Regular Interests, which constitute REMIC II to be treated for federal
income tax purposes as a REMIC. On the Startup Day, the REMIC II Regular
Interests will be designated "regular interests" in such REMIC and the Class
R-II Certificate will be designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the REMIC
II Regular Interests, which constitute REMIC III to be treated for federal
income tax purposes as a REMIC. On the Startup Day, the REMIC III Regular
Interests will be designated "regular interests" in such REMIC and the Class
R-III Certificate will be designated the "residual interests" in such REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $1,083,005,679. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer, the Securities Administrator, EMC and the
Trustee agree as follows:
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
Accepted Master Servicing Practices: With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage servicing practices of
prudent mortgage servicing institutions that master service mortgage loans of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the
Trustee or the Master Servicer (except in its capacity as successor to a
Servicer), or (y) as provided in the applicable Servicing Agreement, to the
extent applicable to any Servicer, but in no event below the standard set
forth in clause (x).
Account: The Master Servicer Collection Account, the Distribution
Account, the Protected Account or the Class XP Reserve Account, as the
context may require.
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to
direct the management and policies of a Person, directly or indirectly,
whether through ownership of voting securities, by contract or otherwise.
"Controlled" and "Controlling" have meanings correlative to the foregoing.
The Trustee may conclusively presume that a Person is not an Affiliate of
another Person unless a Responsible Officer of the Trustee has actual
knowledge to the contrary.
Aggregate Expense Rate: With respect to any Mortgage Loan, the sum of
the Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable).
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Applicable Credit Rating: For any long-term deposit or security, a
credit rating of AAA in the case of S&P or Aaa in the case of Moody's (or
with respect to investments in money market funds, a credit rating of "AAAm"
or "AAAm-G" in the case of S&P and the highest rating given by Moody's for
money market funds in the case of Moody's). For any short-term deposit or
security, or a rating of A-l+ in the case of S&P or Prime-1 in the case of
Moody's.
Applicable State Law: For purposes of Section 9.12(d), the Applicable
State Law shall be (a) the law of the State of New York and (b) such other
state law whose applicability shall have been brought to the attention of the
Securities Administrator and the Trustee by either (i) an Opinion of Counsel
reasonably acceptable to the Securities Administrator and the Trustee
delivered to it by the Master Servicer or the Depositor, or (ii) written
notice from the appropriate taxing authority as to the applicability of such
state law.
Applied Realized Loss Amount: With respect to any Distribution Date and
a Class of Certificates (other than the Class B-IO Certificates and the
Residual Certificates), the sum of the Realized Losses with respect to the
Mortgage Loans, which are to be applied in reduction of the Certificate
Principal Balance of such Class of Certificates pursuant to this Agreement in
an amount equal to the amount, if any, by which, (i) the aggregate
Certificate Principal Balance of all of the Certificates (after all
distributions of principal on such Distribution Date) exceeds (ii) the
aggregate Stated Principal Balance of all of the Mortgage Loans for such
Distribution Date. The Applied Realized Loss Amount shall be allocated first
to the Class B-2 Certificates, the Class B-1 Certificates, the Class M-2
Certificates and the Class M-1 Certificates, in that order (so long as their
respective Certificate Principal Balances have not been reduced to zero), and
thereafter Realized Losses with respect to the Group I Mortgage Loans shall
be allocated to the each Class of the Class I-A Certificates, on a pro rata basis,
until the Certificate Principal Balance of each such Class has been reduced
to zero, and Realized Losses with respect to the Group II Mortgage Loans
shall be allocated first to the Class II-A-2 Certificates until the
Certificate Principal Balance of the Class II-A-2 Certificates has been
reduced to zero, and then to the Class II-A-1 Certificates. If on any
Distribution Date less than all Realized Losses are allocated to the
Subordinate Certificates, the portion of Realized Losses remaining to be
allocated to Senior Certificates shall be allocated pro rata to the Class I-A
Certificates and Class II-A Certificates in accordance with the amount of
Realized Losses incurred in the respective Loan Groups during the related Due
Period.
Appraised Value: For any Mortgaged Property related to a Mortgage Loan,
the amount set forth as the appraised value of such Mortgaged Property in an
appraisal made for the mortgage originator in connection with its origination
of the related Mortgage Loan.
Assignment Agreements: The agreements attached hereto as Exhibit I,
whereby the Servicing Agreements were assigned to the Trustee for the benefit
of the Certificateholders.
Assumed Final Distribution Date: October 25, 2034, or if such day is
not a Business Day, the next succeeding Business Day.
Available Funds: With respect to each Distribution Date, the aggregate
of Principal Funds and Interest Funds for such Distribution Date.
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. §§ 101-1330.
Basis Risk Shortfall: With respect to any Distribution Date and each
Class of Offered Certificates, the excess, if any, of (a) the amount of
Current Interest that such Class would have been entitled to receive on such
Distribution Date had the applicable Pass-Though Rate been calculated at a
per annum rate equal to the lesser of (i) One-Month LIBOR plus the related
Margin and (ii) 11.50% over (b) the amount of Current Interest on such Class
of Offered Certificates calculated using a Pass-Though Rate equal to the
applicable Net Rate Cap for such Distribution Date.
Basis Risk Shortfall Carry Forward Amount: With respect to any
Distribution Date and each Class of Offered Certificates, Basis Risk
Shortfalls for all previous Distribution Dates not previously paid from any
source including the Excess Cashflow and payments under the Cap Contracts,
together with interest thereon at a rate equal to the related Pass-Through
Rate for such Class of Offered Certificates for such Distribution Date.
Book-Entry Certificates: Initially, all Classes of Certificates other
than the Class B-IO, Class XP and the Residual Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee, the
Master Servicer, Custodian, any Servicer or the Securities Administrator are
authorized or obligated by law or executive order to be closed.
Calendar Quarter: January 1 through March 31, April 1 through June 30,
July 1 through September 30, or October 1 through December 31, as applicable.
Cap Contract: With respect to any of the Class I-A, Class II-A, Class
M-1, Class M-2, Class B-1 or Class B-2 Certificates, the respective cap
contracts, dated August 31, 2004, between the Trustee, on behalf of the Class
I-A, Class II-A, Class M-1, Class M-2, Class B-1 or Class B-2
Certificateholders, as the case may be, and Bear Xxxxxxx Financial Products
Inc.
Cap Contract Payment Amount: With respect to any Distribution Date and
a Cap Contract, the amounts received from such Cap Contract, if any, on such
Distribution Date.
Certificate: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by
the Trustee in substantially the forms annexed hereto as Exhibits X-0, X-0,
X-0, X-0, X-0, A-6 and A-7, with the blanks therein appropriately completed.
Certificate Group: With respect to (i) Loan Group I, the Class I-A
Certificates and (ii) Loan Group II, the Class II-A Certificates.
Certificate Owner: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
Certificate Principal Balance: With respect to any Certificate (other
than Class B-IO Certificates or Class R Certificates) as of any Distribution
Date, the initial principal amount of such Certificate plus, with respect to
the Subordinate Certificates, any Subsequent Recoveries added to the
Certificate Principal Amount of such Certificates pursuant to Section 6.02(b)
hereof, minus the sum of (i) all amounts distributed on previous Distribution
Dates on such Certificate with respect to principal and (ii) any Applied
Realized Loss Amounts allocated to such Certificate on previous Distribution
Dates. With respect to any such Class of Certificates, the Certificate
Principal Balance thereof will equal the sum of the Certificate Principal
Balances of all Certificates in such Class.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder: A Holder of a Certificate.
Class: With respect to the Certificates, X-X-0, X-X-0, X-X-0, XX-X-0,
XX-X-0, R-I, R-II, R-III, X-0, X-0, X-0, X-0, XP and B-IO.
Class I-A Certificates: The Class I-A-1 Certificates, Class I-A-2
Certificates and Class I-A-3 Certificates.
Class I-A Principal Distribution Amount: The product of the Class A
Principal Distribution Amount and a fraction, the numerator of which is the
Principal Funds for Loan Group I for such Distribution Date and the
denominator of which is the Principal Funds for both Loan Groups for such
Distribution Date.
Class II-A Certificates: The Class II-A-1 Certificates and Class
II-A-2 Certificates.
Class II-A Principal Distribution Amount: The product of the Class A
Principal Distribution Amount and a fraction, the numerator of which is the
Principal Funds for Loan Group II for such Distribution Date and the
denominator of which is the Principal Funds for both Loan Groups for such
Distribution Date.
Class A Certificates: The Class I-A and Class II-A Certificates.
Class A Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date over (ii) the excess of (a) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over (b) the product
of (1) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (2) the sum of (x) 12.20% and (y) the Current Specified
Overcollateralization Percentage for such Distribution Date.
Class B Certificates: The Class B-1 Certificates and Class B-2
Certificates.
Class B-IO Advances: As defined in Section 6.01(b).
Class B-IO Certificates: The Class B-IO-P and Class B-IO-I
Certificates.
Class B-IO Distribution Amount: With respect to any Distribution Date,
the Current Interest for the Class B-IO Certificate for such Distribution
Date (which shall be deemed distributable to the REMIC III Regular Interest
B-IO-I); provided, however, that on and after the Distribution Date on which
the aggregate Certificate Principal Balance of Class I-A, Class II-A, Class
M-1, Class M-2, Class B-1 or Class B-2 Certificates has been reduced to zero,
the Class B-IO Distribution Amount shall include the Overcollateralization
Amount (which shall be deemed distributable, first, to the REMIC III Regular
Interest B-IO-I in respect of accrued and unpaid interest thereon until such
accrued and unpaid interest shall have been reduced to zero and, thereafter,
to the REMIC III Regular Interest B-IO-P in respect of the principal balance
thereof).
Class B-IO Pass-Through Rate: The Class B-IO Certificates will bear
interest at a per annum rate equal to the percentage equivalent of a
fraction, the numerator of which is the sum of the amounts calculated
pursuant to clauses (i) through (xii) below, and the denominator of which is
the aggregate Uncertificated Principal Balance of the REMIC II Regular
Interests. For purposes of calculating the Pass-Through Rate for the Class
B-IO Certificates, the numerator is equal to the sum of the following
components:
(i) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT1
minus the related Marker Rate, applied to a notional amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT2
minus the related Marker Rate, applied to a notional amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LT2;
(iii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT4
minus twice the related Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC II Regular Interest
LT4.
(iv) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT5
minus the related Marker Rate, applied to a notional amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LT5;
(v) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT6
minus the related Marker Rate, applied to a notional amount equal to
the Uncertificated Principal Balance of REMIC II Regular Interest LT6;
(vi) the Uncertificated Pass-Through Rate for REMIC II Regular Interest LT8
minus twice the related Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC II Regular Interest
LT8;
(vii) the Uncertificated Pass-Through Rate for REMIC II Regular Interest
LT-Y1 minus the related Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC II Regular Interest
LT-Y1; and
(viii) the Uncertificated Pass-Through Rate for REMIC II Regular
Interest LT-Y2 minus the related Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular Interest LT-Y2.
Class B-1 Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the Certificate Principal Balance
of the Class B-1 Certificates immediately prior to such Distribution Date
over (ii) the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date over (b) the sum of (1) the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on such Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class
M-1 Principal Distribution Amount on such Distribution Date), (3) the
Certificate Principal Balance of the Class M-2 Certificates (after taking
into account the payment of the Class M-2 Principal Distribution Amount on
such Distribution Date) and (4) the product of (x) the aggregate Stated
Principal Balance for such Distribution Date and (y) the sum of 1.60% and the
Current Specified Overcollateralization Percentage for such Distribution Date.
Class B-2 Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the Certificate Principal Balance
of the Class B-2 Certificates immediately prior to such Distribution Date
over (ii) the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date over (b) the sum of (1) the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on such Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class
M-1 Principal Distribution Amount on such Distribution Date), (3) the
Certificate Principal Balance of the Class M-2 Certificates (after taking
into account the payment of the Class M-2 Principal Distribution Amount on
such Distribution Date), (4) the Certificate Principal Balance of the Class
B-1 Certificates (after taking into account the payment of the Class B-1
Principal Distribution Amount on such Distribution Date) and (5) the product
of (x) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (y) the Current Specified Overcollateralization
Percentage for such Distribution Date.
Class M Certificates: The Class M-1 and Class M-2 Certificates.
Class M-1 Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the Certificate Principal Balance
of the Class M-1 Certificates immediately prior to such Distribution Date
over (ii) the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date over (b) the sum of (1) the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on such Distribution Date) and (2) the product of (x) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (y)
the sum of (I) 7.40% and (II) the Current Specified Overcollateralization
Percentage for such Distribution Date.
Class M-2 Principal Distribution Amount: For any Distribution Date, an
amount equal to the excess, if any, of (i) the Certificate Principal Balance
of the Class M-2 Certificates immediately prior to such Distribution Date
over (ii) the excess of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date over (b) the sum of (1) the
aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount
on such Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class
M-1 Principal Distribution Amount on such Distribution Date) and (3) the
product of (x) the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date and (y) the sum of (I) 3.60% and (II) the Current
Specified Overcollateralization Percentage for such Distribution Date.
Class R Certificates: The Class R-I, R-II and R-III Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially
in the form annexed hereto as Exhibit A-5 and evidencing an interest
designated as a "residual interest" in REMIC I for purposes of the REMIC
Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A-5 and evidencing an
interest designated as a "residual interest" in REMIC II for purposes of the
REMIC Provisions.
Class R-III Certificate: Any one of the Class R-III Certificates
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit A-5 and evidencing an
interest designated as a "residual interest" in REMIC III for purposes of the
REMIC Provisions.
Class XP Reserve Account: The account established and maintained by
the Master Servicer pursuant to Section 4.07 hereof.
Closing Date: August 31, 2004.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest Payment: As defined in Section 6.06.
Corporate Trust Office: The designated office of the Trustee where at
any particular time its corporate trust business with respect to this
Agreement shall be administered, which office at the date of the execution of
this Agreement is located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Institutional Trust Services/Global Debt, Structured Asset
Mortgage Investments II Inc., Bear Xxxxxxx ALT-A Trust 2004-10, or at such
other address as the Trustee may designate from time to time.
Corresponding REMIC III Regular Interest: With respect to:
(i) the Class I-A-1 Certificates, REMIC III Regular Interest I-A-1,
(ii) the Class I-A-2 Certificates, REMIC III Regular Interest I-A-2,
(iii) the Class I-A-3 Certificates, REMIC III Regular Interest I-A-3,
(iv) the Class II-A-1 Certificates, REMIC III Regular Interest II-A-1,
(v) the Class II-A-2 Certificates, REMIC III Regular Interest
II-A-2,
(vi) the Class M-1 Certificates, REMIC III Regular Interest M1,
(vii) the Class M-2 Certificates, REMIC III Regular Interest M2,
(viii) the Class B Certificates, REMIC III Regular Interest B,
(ix) the Class XP Certificates, REMIC III Regular Interest XP, and
(x) the Class B-IO Certificates, REMIC III Regular Interest B-IO-I
and REMIC III Regular Interest B-IO-P.
Countrywide: Countrywide Home Loans, Inc., and its successor in
interest.
Countrywide Servicing Agreement: The Seller's Warranties and Servicing
Agreement, dated as of September 1, 2002, as amended, between EMC and
Countrywide, as attached hereto as Exhibit H-1.
Current Interest: As of any Distribution Date, with respect to each
Class of Certificates (other than the Class XP Certificates and the Class R
Certificates), (i) the interest accrued on the Certificate Principal Balance
or Notional Amount, as applicable, during the related Interest Accrual Period
at the applicable Pass-Through Rate plus any amount previously distributed
with respect to interest for such Certificate that has been recovered as a
voidable preference by a trustee in bankruptcy minus (ii) the sum of (a) any
Prepayment Interest Shortfall for such Distribution Date, to the extent not
covered by Compensating Interest Payments and (b) any shortfalls resulting
from the application of the Relief Act during the related Due Period;
provided, however, that for purposes of calculating Current Interest for any
such Class, amounts specified in clauses (ii)(a) and (ii)(c) hereof for any
such Distribution Date shall be allocated first to the Class B-IO
Certificates and the Residual Certificates in reduction of amounts otherwise
distributable to such Certificates on such Distribution Date and then any
excess shall be allocated to each other Class of Certificates pro rata based
on the respective amounts of interest accrued pursuant to clause (i) hereof
for each such Class on such Distribution Date.
Current Specified Overcollateralization Percentage: For any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the Overcollateralization Target Amount, and the denominator of
which is the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
Custodial Agreement: An agreement, dated as of the Closing Date among
the Depositor, the Master Servicer, the Trustee and the Custodian in
substantially the form of Exhibit G hereto.
Custodian: Xxxxx Fargo Bank, National Association, and any successor
custodian appointed pursuant to the provisions hereof and of the Custodial
Agreement.
Cut-off Date: August 1, 2004.
Cut-off Date Balance: $1,083,005,679.49.
Debt Service Reduction: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of
any proceeding under the Bankruptcy Code or any other similar state law or
other proceeding.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code or
any other similar state law or other proceeding.
Delinquent: A Mortgage Loan is "Delinquent" if any payment due thereon
is not made pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A Mortgage Loan is
"30 days delinquent" if such payment has not been received by the close of
business on the last day of the month immediately succeeding the month in
which such payment was due. For example, a Mortgage Loan with a payment due
on December 1 that remained unpaid as of the close of business on January 31
would then be considered to be 30 to 59 days delinquent. Similarly for "60
days delinquent," "90 days delinquent" and so on.
Depositor: Structured Asset Mortgage Investments II Inc., a Delaware
corporation, and any successor thereto.
Depository: The Depository Trust Company, the nominee of which is Cede
& Co., and any successor thereto.
Depository Agreement: The meaning specified in Section 5.01(a) hereof.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Designated Depository Institution: A depository institution (commercial
bank, federal savings bank mutual savings bank or savings and loan
association) or trust company (which may include the Trustee), the deposits
of which are fully insured by the FDIC to the extent provided by law.
Determination Date: With respect to each Mortgage Loan, the
Determination Date as defined in the related Servicing Agreement.
Disqualified Organization: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than
an instrumentality which is a corporation if all of its activities are
subject to tax and, except for the Xxxxxxx Mac or any successor thereto, a
majority of its board of directors is not selected by such governmental
unit), (ii) any foreign government, any international organization, or any
agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the
Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code or (v) any other Person so designated by
the Trustee based upon an Opinion of Counsel that the holding of an ownership
interest in a Residual Certificate by such Person may cause any 2004-10 REMIC
contained in the Trust or any Person having an ownership interest in the
Residual Certificate (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but
for the transfer of an ownership interest in a Residual Certificate to such
Person. The terms "United States," "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions.
Distribution Account: The trust account or accounts created and
maintained pursuant to Section 4.04 hereof, which shall be denominated
"JPMorgan Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage
Investments II Inc., Bear Xxxxxxx ALT-A Trust 2004-10, Mortgage Pass-Through
Certificates, Series 2004-10 - Distribution Account."
Distribution Account Deposit Date: The Business Day prior to each
Distribution Date.
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is
not a Business Day, the Business Day immediately following.
DTC Custodian: JPMorgan Chase Bank, and its successors in interest as
custodian for the Depository.
Due Date: With respect to each Mortgage Loan, the date in each month
on which its Scheduled Payment is due if such due date is the first day of a
month and otherwise is deemed to be the first day of the following month or
such other date specified in the related Servicing Agreement.
Due Period: With respect to any Distribution Date and each Mortgage
Loan, the period commencing on the second day of the month preceding the
month in which the Distribution Date occurs and ending at the close of
business on the first day of the month in which the Distribution Date occurs.
Eligible Account: Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term
obligations of which are rated A-1 or better by Standard & Poor's and P-1 by
Moody's at the time of any deposit therein or (B) insured by the FDIC (to the
limits established by such Corporation), the uninsured deposits in which
account are otherwise secured such that, as evidenced by an Opinion of
Counsel (obtained by the Person requesting that the account be held pursuant
to this clause (ii)) delivered to the Trustee prior to the establishment of
such account, the Certificateholders will have a claim with respect to the
funds in such account and a perfected first priority security interest
against any collateral (which shall be limited to Permitted Investments, each
of which shall mature not later than the Business Day immediately preceding
the Distribution Date next following the date of investment in such
collateral or the Distribution Date if such Permitted Investment is an
obligation of the institution that maintains the Distribution Account)
securing such funds that is superior to claims of any other depositors or
general creditors of the depository institution with which such account is
maintained, (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company with trust
powers acting in its fiduciary capacity or (iii) a segregated account or
accounts of a depository institution acceptable to the Rating Agencies (as
evidenced in writing by the Rating Agencies that use of any such account as
the Distribution Account will not have an adverse effect on the then-current
ratings assigned to the Classes of the Certificates then rated by the Rating
Agencies). Eligible Accounts may bear interest.
EMC: EMC Mortgage Corporation, and any successor thereto.
EMC Servicing Agreement: The Servicing Agreement, dated as of August 1,
2004, between Structured Asset Mortgage Investments II Inc. and EMC, as
attached hereto as Exhibit H-2.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: An event of default described in Section 8.01.
Excess Cashflow: With respect to any Distribution Date, the Remaining
Excess Spread for such Distribution Date; provided, however, that the Excess
Cashflow shall include Principal Funds on and after the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A, Class M-1,
Class M-2, Class B-1 and Class B-2 Certificates has been reduced to zero
(other than Principal Funds otherwise distributed to the Holders of Class A,
Class M-1, Class M-2, Class B-1 and Class B-2 Certificates on such
Distribution Date).
Excess Liquidation Proceeds: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed
the sum of (i) the Outstanding Principal Balance of such Mortgage Loan and
accrued but unpaid interest at the related Mortgage Interest Rate through the
last day of the month in which the related Liquidation Date occurs, plus (ii)
related Liquidation Expenses.
Excess Spread: With respect to any Distribution Date, the excess, if
any, of (i) the Interest Funds for such Distribution Date over (ii) the sum
of the Current Interest on the Offered Certificates and Interest Carry
Forward Amounts on the Class A Certificates, in each case for such
Distribution Date.
Extra Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (i) the excess, if any, of the Overcollateralization
Target Amount for such Distribution Date over the Overcollateralization
Amount for such Distribution Date and (ii) the Excess Spread for such
Distribution Date.
Xxxxxx Xxx: Federal National Mortgage Association, and any successor
thereto.
FDIC: Federal Deposit Insurance Corporation, and any successor thereto.
Final Certification: The certification substantially in the form of
Exhibit Three to the Custodial Agreement.
Fitch: Fitch Ratings, and any successor thereto.
Fractional Undivided Interest: With respect to any Class of
Certificates, the fractional undivided interest evidenced by any Certificate
of such Class the numerator of which is the Certificate Principal Balance of
such Certificate and the denominator of which is the Certificate Principal
Balance of such Class. With respect to the Certificates in the aggregate, the
fractional undivided interest evidenced by (i) each Residual Certificate will
be deemed to equal 0.3333% multiplied by the percentage interest of such
Residual Certificate, (ii) the Class B-IO Certificates will be deemed to
equal 1.00% and (iii) a Certificate of any other Class will be deemed to
equal 98% multiplied by a fraction, the numerator of which is the Certificate
Principal Balance of such Certificate and the denominator of which is the
aggregate Certificate Principal Balance of all the Certificates other than
the Class B-IO Certificates.
Xxxxxxx Mac: Xxxxxxx Mac, formerly the Federal Home Loan Mortgage
Corporation, and any successor thereto.
Global Certificate: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an
account with such Depository (directly or as an indirect participant in
accordance with the rules of such depository).
GreenPoint: GreenPoint Mortgage Funding, Inc., and any successor
thereto.
GreenPoint Servicing Agreement: The Purchase, Warranties and Servicing
Agreement, dated as of September 1, 2003, between GreenPoint and EMC attached
hereto as Exhibit H-3.
Gross Margin: As to each Mortgage Loan, the fixed percentage set forth
in the related Mortgage Note and indicated on the Mortgage Loan Schedule
which percentage is added to the related Index on each Interest Adjustment
Date to determine (subject to rounding, the minimum and maximum Mortgage
Interest Rate and the Periodic Rate Cap) the Mortgage Interest Rate until the
next Interest Adjustment Date.
Group I Net WAC Rate: With respect to any Distribution Date, the
weighted average of the Net Rates on the Mortgage Loans in Loan Group I,
weighted on the basis of the Stated Principal Balances thereof for the
preceding Distribution Date, adjusted to an effective rate reflecting the
accrual of interest on an actual/360 basis.
Group I Principal Distribution Amount: The product of the Principal
Distribution Amount and a fraction, the numerator of which is the Principal
Funds for Loan Group I for such Distribution Date and the denominator of
which is the Principal Funds for both Loan Groups for such Distribution Date.
Group II Net WAC Rate: With respect to any Distribution Date, the
weighted average of the Net Rates on the Mortgage Loans in Loan Group II,
weighted on the basis of the Stated Principal Balances thereof for the
preceding Distribution Date, adjusted to an effective rate reflecting the
accrual of interest on an actual/360 basis.
Group II Principal Distribution Amount: The product of the Principal
Distribution Amount and a fraction, the numerator of which is the Principal
Funds for Loan Group II for such Distribution Date and the denominator of
which is the Principal Funds for both Loan Groups for such Distribution Date.
Group II Senior Percentage: The aggregate Certificate Balance of the
Class II-A Certificates divided by the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group II.
Holder: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Sections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or the Trustee or any
Affiliate thereof shall be deemed not to be outstanding and the Fractional
Undivided Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Fractional Undivided
Interests necessary to effect any such consent has been obtained.
Indemnified Persons: The Trustee, the Master Servicer, the Custodian
and the Securities Administrator, and their officers, directors, agents and
employees and, with respect to the Trustee, any separate co-trustee and its
officers, directors, agents and employees.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor or the
Master Servicer and of any Affiliate of the Depositor or the Master Servicer,
(b) does not have any direct financial interest or any material indirect
financial interest in the Depositor or the Master Servicer or any Affiliate
of the Depositor or the Master Servicer and (c) is not connected with the
Depositor or the Master Servicer or any Affiliate as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing
similar functions.
Index: The index, if any, specified in a Mortgage Note by reference to
which the related Mortgage Interest Rate will be adjusted from time to time.
Individual Certificate: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
Initial Certification: The certification substantially in the form of
Exhibit One to the Custodial Agreement.
Institutional Accredited Investor: Any Person meeting the requirements
of Rule 501(a)(l), (2), (3) or (7) of Regulation D under the Securities Act
or any entity all of the equity holders in which come within such paragraphs.
Insurance Policy: With respect to any Mortgage Loan, any standard
hazard insurance policy, flood insurance policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or proceeds that represent reimbursement of
the related Servicer's costs and expenses incurred in connection with
presenting claims under the related Insurance Policy.
Interest Accrual Period: With respect to each Class of Certificates
(other than the Class XP Certificates and Residual Certificates), the period
from and including the preceding Distribution Date (or, in the case of the
first Distribution Date, from the Closing Date) to and including the day
prior to the current Distribution Date.
Interest Adjustment Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage Note on which the Mortgage Interest
Rate is subject to adjustment.
Interest Carryforward Amount: As of any Distribution Date and with
respect to each Class of Certificates (other than the Class XP Certificates,
Class B-IO Certificates and Residual Certificates), the sum of (i) the excess
of (a) the Current Interest for such Class with respect to prior Distribution
Dates over (b) the amount actually distributed to such Class of Certificates
with respect to interest on or after such prior Distribution Dates and (ii)
interest thereon (to the extent permitted by applicable law) at the
applicable Pass-Through Rate for such Class for the related Interest Accrual
Period including the Interest Accrual Period relating to such Distribution
Date.
Interest Funds: For any Distribution Date and a Loan Group (i) the sum,
without duplication, of (a) all scheduled interest collected in respect to
the related Mortgage Loans during the related Due Period less the related
Servicing Fee, (b) all Monthly Advances relating to interest with respect to
the related Mortgage Loans made on or prior to the related Distribution
Account Deposit Date, (c) all Compensating Interest Payments with respect to
the related Mortgage Loans and required to be remitted by the Master Servicer
pursuant to this Agreement or the related Servicer pursuant to the related
Servicing Agreement with respect to such Distribution Date, (d) Liquidation
Proceeds with respect to the related Mortgage Loans collected during the
related Prepayment Period (or, in the case of Subsequent Recoveries, during
the related Due Period), to the extent such Liquidation Proceeds relate to
interest, (e) all amounts relating to interest with respect to each related
Mortgage Loan purchased by EMC pursuant to Sections 2.02 and 2.03 or by the
Depositor pursuant to Section 3.21 during the related Due Period and (f) all
amounts in respect of interest paid by EMC pursuant to Section 10.01 in
respect to the related Loan Group, in each case to the extent remitted by EMC
or the related Servicer, as applicable, to the Distribution Account pursuant
to this Agreement or the related Servicing Agreement minus (ii) all amounts
relating to interest required to be reimbursed pursuant to Sections 4.01,
4.03 and 4.05 or as otherwise set forth in this Agreement and allocated to
the related Loan Group.
Interim Certification: The certification substantially in the form of
Exhibit Two to the Custodial Agreement.
Investment Letter: The letter to be furnished by each Institutional
Accredited Investor which purchases any of the Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.
Lender-Paid PMI Rate: With respect to each Mortgage Loan covered by a
lender-paid primary mortgage insurance policy, the amount payable to the
related insurer, as stated in the Mortgage Loan Schedule.
LIBOR Business Day: Any day other than a Saturday or a Sunday or a day
on which banking institutions in the city of London, England are required or
authorized by law to be closed.
LIBOR Determination Date: With respect to each Class of Offered
Certificates and for the first Interest Accrual Period, August 26, 2004. With
respect to each Class of Offered Certificates and any Interest Accrual Period
thereafter, the second LIBOR Business Day preceding the commencement of such
Interest Accrual Period.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Servicer or the Master Servicer has determined that all amounts it expects to
recover from or on account of such Mortgage Loan have been recovered.
Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on which the Servicer or the Master Servicer has certified that such
Mortgage Loan has become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Servicer,
such expenses including (a) property protection expenses, (b) property sales
expenses, (c) foreclosure and sale costs, including court costs and
reasonable attorneys' fees, and (d) similar expenses reasonably paid or
incurred in connection with liquidation.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure
sale, Insurance Proceeds, condemnation proceeds or otherwise, and Subsequent
Recoveries.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related Mortgage Loan and the denominator of which is the
Original Value of the related Mortgaged Property.
Loan Group: Loan Group I or Loan Group II, as applicable.
Loan Group I: The group of Mortgage Loans designated as belonging to
Loan Group I on the Mortgage Loan Schedule.
Loan Group II: The group of Mortgage Loans designated as belonging to
Loan Group II on the Mortgage Loan Schedule.
Lost Notes: The original Mortgage Notes that have been lost, as
indicated on the Mortgage Loan Schedule.
Margin: With respect to any Distribution Date on or prior to the first
possible Optional Termination Date and (i) with respect to the Class I-A-1
Certificates, 0.34% per annum, (ii) with respect to the Class I-A-2
Certificates, 0.22% per annum, (iii) with respect to the Class I-A-3
Certificates, 0.50% per annum, (iv) with respect to the Class II-A-1
Certificates, 0.33% per annum, (v) with respect to the Class II-A-2
Certificates, 0.45% per annum, (vi) with respect to the Class M-1
Certificates, 0.60% per annum, (vii) with respect to the Class M-2
Certificates, 1.10% per annum, (viii) with respect to the Class B-1
Certificates, 1.80% per annum, and (ix) with respect to the Class B-2
Certificates, 1.80% per annum; and with respect to any Distribution Date
after the first possible Optional Termination Date and (i) with respect to
the Class I-A-1 Certificates, 0.68% per annum, (ii) with respect to the Class
I-A-2 Certificates, 0.44% per annum, (iii) with respect to the Class I-A-3
Certificates, 1.00% per annum, (iv) with respect to the Class II-A-1
Certificates, 0.66% per annum, (v) with respect to the Class II-A-2
Certificates, 0.90% per annum, (vi) with respect to the Class M-1
Certificates, 0.90% per annum, (vii) with respect to the Class M-2
Certificates, 1.65% per annum, (viii) with respect to the Class B-1
Certificates, 2.70% per annum, and (ix) with respect to the Class B-2
Certificates, 2.70% per annum.
Marker Rate: With respect to the Class B-IO Certificates or the REMIC
III Regular Interest B-IO-I and any Distribution Date, in relation to the
REMIC II Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, a per annum rate
equal to two (2) times the weighted average of the Uncertificated REMIC II
Pass-Through Rates for REMIC II Regular Interest LT2 and REMIC II Regular
Interest LT3. With respect to the Class B-IO Certificates or the REMIC III
Regular Interest B-IO-I and any Distribution Date, in relation to the
REMIC II Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, a per annum rate
equal to two (2) times the weighted average of the Uncertificated REMIC II
Pass-Through Rates for REMIC II Regular Interest LT6 and REMIC II Regular
Interest LT7.
Master Servicer: As of the Closing Date, Xxxxx Fargo Bank, National
Association and, thereafter, its respective successors in interest who meet
the qualifications of the Servicing Agreements and this Agreement.
Master Servicer Certification: A written certification covering
servicing of the Mortgage Loans by all Servicers and signed by an officer of
the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx Act of 2002, as
amended from time to time, and (ii) the February 21, 2003 Statement by the
Staff of the Division of Corporation Finance of the Securities and Exchange
Commission Regarding Compliance by Asset-Backed Issuers with Exchange Act
Rules 13a-14 and 15d-14, as in effect from time to time; provided that if,
after the Closing Date (a) the Xxxxxxxx-Xxxxx Act of 2002 is amended, (b) the
Statement referred to in clause (ii) is modified or superceded by any
subsequent statement, rule or regulation of the Securities and Exchange
Commission or any statement of a division thereof, or (c) any future
releases, rules and regulations are published by the Securities and Exchange
Commission from time to time pursuant to the Xxxxxxxx-Xxxxx Act of 2002,
which in any such case affects the form or substance of the required
certification and results in the required certification being, in the
reasonable judgment of the Master Servicer, materially more onerous than the
form of the required certification as of the Closing Date, the Master
Servicer Certification shall be as agreed to by the Master Servicer and the
Depositor following a negotiation in good faith to determine how to comply
with any such new requirements.
Master Servicer Collection Account: The trust account or accounts
created and maintained pursuant to Section 4.02, which shall be denominated
"JPMorgan Chase Bank, as Trustee f/b/o holders of Structured Asset Mortgage
Investments II Inc., Bear Xxxxxxx ALT-A Trust 2004-10, Mortgage Pass-Through
Certificates, Series 2004-10 - Master Servicer Collection Account," and which
shall be an Eligible Account.
Master Servicing Compensation: The meaning specified in Section 3.14.
Material Defect: The meaning specified in Section 2.02(b).
Maximum Lifetime Mortgage Rate: The maximum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes
in the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto.
MERS System: The system of recording transfers of Mortgage Loans
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS System.
Minimum Lifetime Mortgage Rate: The minimum level to which a Mortgage
Interest Rate can adjust in accordance with its terms, regardless of changes
in the applicable Index.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Advance: An advance of principal or interest required to be
made by the applicable Servicer pursuant to the related Servicing Agreement
or the Master Servicer pursuant to Section 6.05.
Monthly Delinquency Percentage: With respect to a Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the
aggregate Stated Principal Balance of the Mortgage Loans that are 60 days or
more Delinquent or are in bankruptcy or foreclosure or are REO Properties for
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of Mortgage Loans for such Distribution Date.
Moody's: Xxxxx'x Investors Service, Inc., and any successor in interest.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note,
which rate is equal to the "Mortgage Interest Rate" set forth with respect
thereto on the Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.04 and held as a part of the Trust
Fund, as identified in the Mortgage Loan Schedule (which shall include,
without limitation with respect to each Mortgage Loan, each related Mortgage
Note, Mortgage and Mortgage File and all rights appertaining thereto),
including a mortgage loan the property securing which has become an REO
Property.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of August 31, 2004, between EMC, as seller, and Structured Asset
Mortgage Investments II Inc., as purchaser, and all amendments thereof and
supplements thereto, attached as Exhibit J.
Mortgage Loan Schedule: The schedule attached hereto as Exhibit B with
respect to the Mortgage Loans and divided into Loan Groups, as amended from
time to time to reflect the repurchase or substitution of Mortgage Loans
pursuant to this Agreement or the Mortgage Loan Purchase Agreement, as the
case may be.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
Mortgagor: The obligor on a Mortgage Note.
Net Interest Shortfall: With respect to any Distribution Date, the
Prepayment Interest Shortfall, if any, for such Distribution Date net of
Compensating Interest Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable
therefrom by the Master Servicer or the Servicer in accordance with the
related Servicing Agreement or this Agreement and (ii) unreimbursed advances
by the Master Servicer or the Servicer and Monthly Advances.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the Aggregate Expense Rate (expressed
as a per annum rate).
Net Rate Cap: For any Distribution Date and (i) each of the Class I-A
and the Class II-A Certificates, the weighted average of the Net Rates of the
Mortgage Loans in the related Loan Group as of the beginning of the related
Due Period, weighted on the basis of the Stated Principal Balances thereof as
of the preceding Distribution Date, as adjusted to an effective rate
reflecting the accrual of interest on the basis of a 360-day year and the
actual number of days elapsed in the related Interest Accrual Period and (ii)
each of the Class M Certificates and the Class B Certificates, the weighted
average of the Net Rates on the Mortgage Loans in each Loan Group, weighted
in proportion to the results of subtracting from the aggregate Stated
Principal Balance of each Loan Group, the Certificate Principal Balance of
the related classes of Senior Certificates, as adjusted to an effective rate
reflecting the accrual of interest on the basis of a 360-day year and the
actual number of days elapsed in the related Interest Accrual Period. For
federal income tax purposes, the Net Rate Cap (a) with respect to the Class
I-A Certificates, is equal to the Uncertificated REMIC II Pass-Through Rate
for the REMIC II Regular Interests LT1, LT2 and LT-Y1, (b) with respect to
the Class II-A Certificates, is equal to the Uncertificated Pass-Through Rate
for the REMIC II Regular Interests LT5, LT6 and LT-Y2 and (c) with respect to
the Class M Certificates and Class B Certificates is the weighted average of
the Uncertificated REMIC II Pass-Through Rates on the LT-Y1 and LT-Y2 REMIC
II Regular Interests, weighted on the basis of their respective
Uncertificated Principal Balances.
Nonrecoverable Advance: Any advance or Monthly Advance (i) which was
previously made or is proposed to be made by the Master Servicer, the Trustee
(as successor Master Servicer) or the applicable Servicer and (ii) which, in
the good faith judgment of the Master Servicer, the Trustee or the applicable
Servicer, will not or, in the case of a proposed advance or Monthly Advance,
would not, be ultimately recoverable by the Master Servicer, the Trustee (as
successor Master Servicer) or the applicable Servicer from Liquidation
Proceeds, Insurance Proceeds or future payments on the Mortgage Loan for
which such advance or Monthly Advance was made.
Notional Amount: The Notional Amount of the Class B-IO Certificates
immediately prior to any Distribution Date is equal to the aggregate of the
Uncertificated Principal Balances of the REMIC II Regular Interests.
Offered Certificate: Any Senior Certificate or Offered Subordinate
Certificate.
Offered Subordinate Certificate: Any of the Class M-1, Class M-2, Class
B-1 or Class B-2 Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of the Master Servicer
or the Depositor, as applicable, and delivered to the Trustee, as required by
this Agreement.
One-Month LIBOR: With respect to any Interest Accrual Period, the rate
determined by the Securities Administrator on the related LIBOR Determination
Date on the basis of the rate for U.S. dollar deposits for one month that
appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
LIBOR Determination Date; provided that the parties hereto acknowledge that
One-Month LIBOR for the first Interest Accrual Period shall equal 1.64% per
annum. If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered,
such other service for displaying One-Month LIBOR or comparable rates as may
be reasonably selected by the Securities Administrator), One-Month LIBOR for
the applicable Interest Accrual Period will be the Reference Bank Rate. If no
such quotations can be obtained by the Securities Administrator and no
Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Interest Accrual Period.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for EMC, the
Master Servicer or the Depositor.
Optional Termination Date: The Distribution Date on which the aggregate
Stated Principal Balance of all of the Mortgage Loans is equal to or less
than 20% of the aggregate Stated Principal Balance of all of the Mortgage
Loans as of the Cut-off Date.
Original Subordinate Principal Balance: The sum of the aggregate
Certificate Principal Balances of each Class of Subordinate Certificates as
of the Closing Date.
Original Value: The lesser of (i) the Appraised Value or (ii) the sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except in instances where either clauses (i) or (ii) is unavailable, the
other may be used to determine the Original Value, or if both clauses (i) and
(ii) are unavailable, Original Value may be determined from other sources
reasonably acceptable to the Depositor.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased or replaced.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor,
or, in the case of an REO Property, the principal balance of the related
Mortgage Loan remaining to be paid by the Mortgagor at the time such property
was acquired by the Trust Fund less any Net Liquidation Proceeds with respect
thereto to the extent applied to principal.
Overcollateralization Amount: With respect to any Distribution Date,
the excess, if any, of (a) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date over (b) the aggregate Certificate
Principal Balance of the Offered Certificates on such Distribution Date
(after taking into account the payment of principal other than any Extra
Principal Distribution Amount on such Certificates).
Overcollateralization Target Amount: $3,790,520.
Pass-Through Rate: As to each Class of Certificates, the REMIC I
Regular Interests and the REMIC II Regular Interests, the rate of interest
determined as provided with respect thereto in Section 5.01(c).
Periodic Rate Cap: With respect to each Mortgage Loan, the maximum
adjustment that can be made to the Mortgage Interest Rate on each Interest
Adjustment Date in accordance with its terms, regardless of changes in the
applicable Index.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(1) direct obligations of, and obligations the timely payment
of which are fully guaranteed by the United States of America or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(2) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof (including the Trustee or the Master Servicer or its
Affiliates acting in its commercial banking capacity) and subject to
supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term
debt rating and/or the long-term unsecured debt obligations of such
depository institution or trust company at the time of such investment
or contractual commitment providing for such investment have the
Applicable Credit Rating or better from each Rating Agency and (b) any
other demand or time deposit or certificate of deposit that is fully
insured by the Federal Deposit Insurance Corporation;
(3) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, the obligations of which are backed by the full faith and
credit of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (ii)(a) above where the Trustee holds the security
therefor;
(4) securities bearing interest or sold at a discount issued by
any corporation (including the Trustee or the Master Servicer or its
Affiliates) incorporated under the laws of the United States of America
or any state thereof that have the Applicable Credit Rating or better
from each Rating Agency at the time of such investment or contractual
commitment providing for such investment; provided, however, that
securities issued by any particular corporation will not be Permitted
Investments to the extent that investments therein will cause the then
outstanding principal amount of securities issued by such corporation
and held as part of the Trust to exceed 10% of the aggregate
Outstanding Principal Balances of all the Mortgage Loans and Permitted
Investments held as part of the Trust;
(5) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than one year after the date of
issuance thereof) having the Applicable Credit Rating or better from
each Rating Agency at the time of such investment;
(6) a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(7) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as
evidenced in writing by each Rating Agency to the Trustee; and
(8) any money market or common trust fund having the Applicable
Credit Rating or better from each Rating Agency, including any such
fund for which the Trustee or the Master Servicer or any affiliate of
the Trustee or the Master Servicer acts as a manager or an advisor;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument
or if such security provides for payment of both principal and interest with
a yield to maturity in excess of 120% of the yield to maturity at par or if
such instrument or security is purchased at a price greater than par.
Permitted Transferee: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Physical Certificates: The Residual Certificates and the Private
Certificates.
Plan: The meaning specified in Section 5.07(a).
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof.
Prepayment Charge Loan: Any Mortgage Loan for which a Prepayment Charge
may be assessed and to which such Prepayment Charge the Class XP Certificates
are entitled, as indicated on the Mortgage Loan Schedule.
Prepayment Interest Shortfall: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a partial Principal
Prepayment, a Principal Prepayment in full, or that became a Liquidated Loan
during the related Prepayment Period, (other than a Principal Prepayment in
full resulting from the purchase of a Mortgage Loan pursuant to Section 2.02,
2.03, 3.21 or 10.01 hereof), the amount, if any, by which (i) one month's
interest at the applicable Net Rate on the Stated Principal Balance of such
Mortgage Loan immediately prior to such prepayment (or liquidation) or in the
case of a partial Principal Prepayment on the amount of such prepayment (or
liquidation proceeds) exceeds (ii) the amount of interest paid or collected
in connection with such Principal Prepayment or such liquidation proceeds
less the sum of (a) any Prepayment Charges and (b) the related Servicing Fee.
Prepayment Period: With respect to a Distribution Date is the
immediately preceding calendar month in the case of the Mortgage Loans for
which EMC is the Servicer and in the case of the Mortgage Loans for which EMC
is not the Servicer such period as is provided in the related Servicing
Agreement with respect to the related Servicer.
Primary Mortgage Insurance Policy: A policy underwriting primary
mortgage insurance.
Principal Distribution Amount: With respect to each Distribution Date,
an amount equal to sum of (i) the sum of the Principal Funds for both Loan
Groups for such Distribution Date and (ii) any Extra Principal Distribution
Amount for such Distribution Date.
Principal Funds: With respect to any Distribution Date and each Loan
Group, (i) the sum, without duplication, of (a) all scheduled principal
collected on the Mortgage Loans in the related Loan Group during the related
Due Period, (b) all Monthly Advances relating to principal made on the
Mortgage Loans in the related Loan Group on or before the Distribution
Account Deposit Date, (c) Principal Prepayments on the Mortgage Loans in the
related Loan Group, exclusive of prepayment charges or penalties, collected
during the related Prepayment Period, (d) the Stated Principal Balance of
each Mortgage Loan in the related Loan Group that was purchased by the Seller
pursuant to Section 2.02, 2.03 or 3.21 during the related Due Period, (e) the
aggregate of all Substitution Adjustment Amounts in connection with the
substitution of Mortgage Loans in the related Loan Group pursuant to Section
2.04 during the related Due Period, (f) amounts in respect of principal paid
by EMC pursuant to Section 10.01 and (g) all Liquidation Proceeds collected
during the related Prepayment Period (or, in the case of Subsequent
Recoveries, during the related Due Period) on Mortgage Loans in the related
Loan Group, to the extent such Liquidation Proceeds relate to principal, in
each case to the extent remitted by EMC or the related Servicer to the
Distribution Account pursuant to this Agreement or the related Servicing
Agreement minus (ii) all amounts required to be reimbursed pursuant to
Sections 4.01, 4.03 and 4.05 or as otherwise set forth in this Agreement.
Principal Prepayment: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as
to interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment, including Insurance
Proceeds and the Repurchase Proceeds, but excluding the principal portion of
Net Liquidation Proceeds.
Private Certificate: Any Class XP Certificate, Class B-IO Certificate
or Class R Certificate.
Prospectus: The prospectus, dated May 14, 2004, as supplemented by the
prospectus supplement dated August 27, 2004, relating to the offering of the
Certificates.
Protected Account: An account established and maintained for the
benefit of Certificateholders by each Servicer with respect to the related
Mortgage Loans and with respect to REO Property pursuant to the respective
Servicing Agreements.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the
claims paying ability of which is acceptable to the Rating Agencies for
pass-through certificates having the same rating as the Certificates rated by
the Rating Agencies as of the Closing Date.
Rating Agencies: S&P and Moody's.
Realized Loss: Any (i) Bankruptcy Loss or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated
Mortgage Loan plus accrued and unpaid interest thereon at the Mortgage
Interest Rate through the last day of the month of such liquidation, less (y)
the related Net Liquidation Proceeds with respect to such Mortgage Loan and
the related Mortgaged Property; provided, however, that in the event the
Master Servicer receives Subsequent Recoveries with respect to any Mortgage
Loan, the amount of the Realized Loss with respect to that Mortgage Loan will
be reduced to the extent such Subsequent Recoveries are applied to reduce the
Certificate Principal Balance of any Class of Certificates on any
Distribution Date.
Record Date: For each Class of Certificates, the Business Day preceding
the applicable Distribution Date so long as such Class of Certificates
remains in book-entry form; and otherwise, the close of business on the last
Business Day of the month immediately preceding the month of such
Distribution Date.
Reference Bank: A leading bank selected by the Securities Administrator
that is engaged in transactions in Eurodollar deposits in the international
Eurocurrency market.
Reference Bank Rate: With respect to any Interest Accrual Period, the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple
of 0.03125%, of the offered rates for United States dollar deposits for one
month that are quoted by the Reference Banks as of 11:00 a.m., New York City
time, on the related interest determination date to prime banks in the London
interbank market for a period of one month in amounts approximately equal to
the aggregate Certificate Principal Balance of all Classes of Offered
Certificates for such Interest Accrual Period, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates
appear, the Reference Bank Rate will be the arithmetic mean, rounded upwards,
if necessary, to the nearest whole multiple of 0.03125%, of the rates quoted
by one or more major banks in New York City, selected by the securities
administrator, as of 11:00 a.m., New York City time, on such date for loans
in U.S. dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
all Classes of Offered Certificates.
Reinvestment Agreements: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
Relief Act: The Servicemembers' Civil Relief Act, or similar state laws.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
Remaining Excess Spread: With respect to any Distribution Date, the
excess of the related Excess Spread over the related Extra Principal
Distribution Amount.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Mortgage Loans, (ii) amounts on deposit in the
Master Servicer Collection Account related to the Mortgage Loans, (iii) any
REO Property relating to the Mortgage Loans, (iv) the rights of the Trust
with respect the Mortgage Loans under any related Servicing Agreement, (v)
the rights of the Trust with respect the Mortgage Loans under any related
Assignment Agreement or insurance policy and (vi) any proceeds of the
foregoing, but not including the Cap Contract or any proceeds thereof.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.
REMIC I Realized Loss: Realized Losses on Group I Loans and Group II
Loans shall be allocated to the REMIC I Regular Interests as follows: (1) The
interest portion of Realized Losses on Group I Loans, if any, shall be
allocated among the REMIC I Y-1 and REMIC I Z-1 Regular Interests pro rata
according to the amount of interest accrued but unpaid thereon, in reduction
thereof and (2) the interest portion of Realized Losses on Group II Loans, if
any, shall be allocated among the REMIC I Y-2 and REMIC I Z-2 Regular
Interests pro rata according to the amount of interest accrued but unpaid
thereon, in reduction thereof. Any interest portion of such Realized Losses
in excess of the amount allocated pursuant to the preceding sentence shall be
treated as a principal portion of Realized Losses not attributable to any
specific Mortgage Loan in such Loan Group and allocated pursuant to the
succeeding sentences. The principal portion of Realized Losses with respect
to Loan Group I and Loan Group II shall be allocated to the REMIC I Regular
Interests as follows: (1) The principal portion of Realized Losses on Group I
Loans shall be allocated, first, to the REMIC I Y-1 Regular Interest to the
extent of the REMIC I Y-1 Principal Reduction Amount in reduction of the
Uncertificated Principal Balance of such REMIC I Regular Interest and,
second, the remainder, if any, of such principal portion of such Realized
Losses shall be allocated to the REMIC I Z-1 Regular Interest in reduction of
the Uncertificated Principal Balance thereof and (2) the principal portion of
Realized Losses on Group II Loans shall be allocated, first, to the REMIC I
Y-2 Regular Interest to the extent of the REMIC I Y-2 Principal Reduction
Amount in reduction of the Uncertificated Principal Balance of such Regular
Interest and, second, the remainder, if any, of such principal portion of
such Realized Losses shall be allocated to the REMIC I Z-2 Regular Interest
in reduction of the Uncertificated Principal Balance thereof.
REMIC I Regular Interests: REMIC I Y-1 Regular Interest, REMIC I Y-2
Regular Interest, REMIC I Z-1 Regular Interest and REMIC I Z-2 Regular
Interest.
REMIC I Y Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the REMIC I Y-1
Regular Interests and REMIC I Y-2 Regular Interests, respectively, will be
reduced on such Distribution Date by the allocation of Realized Losses and
the distribution of principal, determined as described in Appendix 1.
REMIC I Y Regular Interests: The REMIC I Y-1 Regular Interest and REMIC
I Y-2 Regular Interest.
REMIC I Y-1 Principal Distribution Amount: For any Distribution Date,
the excess, if any, of the REMIC I Y-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the REMIC I Y-1 Regular Interest on such Distribution Date.
REMIC I Y-1 Regular Interest: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as
a "regular interest" in REMIC I. REMIC I Y-1 Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in Section 5.01(c).
REMIC I Y-2 Principal Distribution Amount: For any Distribution Date,
the excess, if any, of the REMIC I Y-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the REMIC I Y-2 Regular Interest on such Distribution Date.
REMIC I Y-2 Regular Interest: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as
a "regular interest" in REMIC I. REMIC I Y-2 Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in Section 5.01(c).
REMIC I Z Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the REMIC I Z-1
Regular Interests and REMIC I Z-2 Regular Interests, respectively, will be
reduced on such Distribution Date by the allocation of Realized Losses and
the distribution of principal, which shall be in each case the excess of (A)
the sum of (x) the excess of the REMIC I Available Distribution Amount for
the related Loan Group (i.e. the "related Loan Group" for the REMIC I Z-1
Regular Interest is Loan Group I and the "related Loan Group" for the REMIC I
Z-2 Regular Interest is Loan Group II) over the sum of the amounts thereof
distributable (i) in respect of interest on such REMIC I Z Regular Interest
and the related REMIC I Y Regular Interest and (iv) to such REMIC I Z Regular
Interest and the related REMIC I Y Regular Interest pursuant to clause (c)(i)
of the definition of "REMIC I Distribution Amount" and (y) the amount of
Realized Losses allocable to principal for the related Loan Group over (B)
the REMIC I Y Principal Reduction Amount for the related Loan Group.
REMIC I Z Regular Interests: The REMIC II Z-1 Regular Interest and
REMIC I Z-2 Regular Interest.
REMIC I Z-1 Principal Distribution Amount: For any Distribution Date,
the excess, if any, of the REMIC I Z-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the REMIC I Z-1 Regular Interest on such Distribution Date.
REMIC I Z-1 Regular Interest: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as
a "regular interest" in REMIC I. REMIC I Z-1 Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in Section 5.01(c).
REMIC I Z-2 Principal Distribution Amount: For any Distribution Date,
the excess, if any, of the REMIC I Z-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to
the REMIC I Z-2 Regular Interest on such Distribution Date.
REMIC I Z-2 Regular Interest: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as
a "regular interest" in REMIC I. REMIC I Z-2 Regular Interest shall accrue
interest at the related Uncertificated REMIC I Pass-Through Rate in effect
from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to
its initial Uncertificated Principal Balance as set forth in Section 5.01(c).
REMIC I Available Distribution Amount: For each Loan Group for any
Distribution Date, the sum of the Principal Funds and Interest Funds for such
Loan Group
REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to the REMIC I Regular
Interests and the Class R-I Certificates in the following amounts and
priority:
(a) To the extent of the REMIC I Available Distribution Amount for
Loan Group I:
(i) first, to REMIC I Y-1 and REMIC I Z-1 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such Regular
Interests remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
(ii) second, to the REMIC I Y-1 and REMIC I Z-1 Regular
Interests, concurrently, the Uncertificated Accrued Interest for such
Classes for the current Distribution Date, pro rata according to their
respective Uncertificated Accrued Interest;
(iii) third, to the REMIC I Y-1 and REMIC I Z-1 Regular
Interests, the REMIC I Y-1 Principal Distribution Amount and the REMIC
I Z-1 Principal Distribution Amount, respectively.
(b) To the extent of the REMIC I Available Distribution Amount for
Loan Group II:
(i) first, to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests, concurrently, the Uncertificated Accrued Interest for such
Classes remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
(ii) second, to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests, concurrently, the Uncertificated Accrued Interest for such
Classes for the current Distribution Date, pro rata according to their
respective Uncertificated Accrued Interest; and
(iii) third, to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests, the REMIC I Y-2 Principal Distribution Amount and the REMIC
I Z-2 Principal Distribution Amount, respectively.
(c) To the extent of the REMIC I Available Distribution Amounts for
Loan Group I and Loan Group II for such Distribution Date remaining after
payment of the amounts pursuant to paragraphs (a) and (b) of this definition
of "REMIC I Distribution Amount":
(i) first, to each Class of REMIC I Y and REMIC I Z Regular
Interests, pro rata according to the amount of unreimbursed Realized
Losses allocable to principal previously allocated to each such Regular
Interest, the aggregate amount of any distributions to the Certificates
as reimbursement of such Realized Losses on such Distribution Date
pursuant to clauses Third through Fifth in Section 6.01(a); provided,
however, that any amounts distributed pursuant to this paragraph (c)(i)
of this definition of "REMIC I Distribution Amount" shall not cause a
reduction in the Uncertificated Principal Balances of any of the REMIC
I Y and REMIC I Z Regular Interests; and
(ii) second, to the Class R-I Certificates, any remaining amount.
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Interests.
REMIC II Interests: The REMIC II Regular Interests and the Class R-II
Certificates.
REMIC II Available Distribution Amount: For each Loan Group and a
Distribution Date, the sum of the Principal Funds and Interest Funds for such
Loan Group.
REMIC II Distribution Amount:
(i) On each Distribution Date, the following amounts, in the following
order of priority, shall be distributed by REMIC II to REMIC III on
account of the REMIC II Regular Interests related to Loan Group I:
(1) to the extent of the REMIC II Available Distribution Amount related to
Loan Group I, to REMIC III as the holder of REMIC II
Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, pro rata,
in an amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts
in respect thereof remaining unpaid from previous
Distribution Dates;
(2) to the extent of prepayment charges received with respect to the
Mortgage Loans in Loan Group I, the amount of prepayment
charges distributable to the Class XP Certificates from
amounts collected with respect to Mortgage Loans in Loan
Group I to the REMIC II Regular Interest LT-Y1; and
(3) on each Distribution Date, to REMIC III as the holder of the REMIC II
Regular Interests, in an amount equal to the remainder of
the REMIC II Available Distribution Amount related to Loan
Group I after the distributions made pursuant to clauses
(1) and (2) above, allocated as follows (except as provided
below):
(A) in respect of the REMIC II Regular Interests
LT2, LT3, LT4 and LT-Y1, their respective Principal
Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT1
any remainder until the Uncertificated Principal Balance
thereof is reduced to zero;
(C) any remainder in respect of the REMIC II
Regular Interests LT2, LT3 and LT4, pro rata according to
their respective Uncertificated Principal Balances as
reduced by the distributions deemed made pursuant to (A)
above, until their respective Uncertificated Principal
Balances are reduced to zero; and
(D) any remaining amounts of the REMIC II Available
Distribution Amount related to Loan Group I to the Holders
of the Class R-II Certificates.
(ii) On each Distribution Date, the following amounts, in the following
order of priority, shall be distributed by REMIC II to REMIC III on
account of the REMIC II Regular Interests related to Loan Group II:
(1) to the extent of the REMIC II Available Distribution Amount related to
Loan Group II, to REMIC III as the holder of REMIC II
Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, pro rata,
in an amount equal to (A) their Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts
in respect thereof remaining unpaid from previous
Distribution Dates;
(2) to the extent of prepayment charges received with respect to the
Mortgage Loans in Loan Group II, the amount of prepayment
charges distributable to the Class XP Certificates from
amounts collected with respect to Mortgage Loans in Loan
Group II to the REMIC II Regular Interest LT-Y2; and
(3) on each Distribution Date, to REMIC III as the holder of the REMIC II
Regular Interests, in an amount equal to the remainder of
the REMIC II Available Distribution Amount related to Loan
Group II after the distributions made pursuant to clauses
(1) and (2) above, allocated as follows (except as provided
below):
(A) in respect of the REMIC II Regular Interests
LT6, LT7, LT8 and LT-Y2, their respective Principal
Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT5
any remainder until the Uncertificated Principal Balance
thereof is reduced to zero;
(C) any remainder in respect of the REMIC II
Regular Interests LT6, LT7 and LT8, pro rata according to
their respective Uncertificated Principal Balances as
reduced by the distributions deemed made pursuant to (A)
above, until their respective Uncertificated Principal
Balances are reduced to zero; and
(D) any remaining amounts of the Group II REMIC II
Available Distribution Amount related to Loan Group II to
the Holders of the Class R-II Certificates.
REMIC II Principal Reduction Amounts: For any Distribution Date, the
amounts by which the principal balances of the REMIC II Regular Interests
LT1, LT2, LT3, LT4, LT5, LT6, LT7, LT8, LT-Y1 and LT-Y2, respectively, will
be reduced on such Distribution Date by the allocation of Realized Losses and
the distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
Y1 = the aggregate principal balance of the REMIC II Regular Interests
LT1 and LT-Y1 after distributions on the prior Distribution Date.
Y2 = the principal balance of the REMIC II Regular Interest LT2 after
distributions on the prior Distribution Date.
Y3 = the principal balance of the REMIC II Regular Interest LT3 after
distributions on the prior Distribution Date.
Y4 = the principal balance of the REMIC II Regular Interest LT4 after
distributions on the prior Distribution Date (note: Y3 = Y4).
ΔY1 = the combined REMIC II Regular Interest LT1 and LT-Y1 Principal
Reduction Amount. Such amount shall be allocated first to REMIC II Regular
Interest LT-Y1 up to the REMIC II Regular Interest LT-Y1 Principal Reduction
Amount and thereafter the remainder shall be allocated to REMIC II Regular
Interest LT1.
ΔY2 = the REMIC II Regular Interest LT2 Principal Reduction Amount.
ΔY3 = the REMIC II Regular Interest LT3 Principal Reduction Amount.
ΔY4 = the REMIC II Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of the REMIC II Regular Interests
LT1, LT2, LT3, LT4 and LT-Y1 after distributions and the allocation of
Realized Losses on the prior Distribution Date.
P1 = the aggregate principal balance of the REMIC II Regular Interests
LT1, LT2, LT3, LT4 and LT-Y1 after distributions and the allocation of
Realized Losses to be made on such Distribution Date.
ΔP = P0 - P1 = the aggregate of the REMIC II Regular Interest LT1,
LT2, LT3, LT4 and LT-Y1 Principal Reduction Amounts, which
= the aggregate of the principal portions of Realized Losses
to be allocated, and the principal distributions to be made with respect to
the Mortgage Loans in Loan Group I on such Distribution Date (including
principal distributed in respect of accrued and unpaid interest on the Class
B-IO Certificates for prior Distribution Dates).
R0 = the Group I Net WAC Rate (stated as a monthly rate) after giving
effect to amounts distributed and Realized Losses allocated on the prior
Distribution Date.
R1 = the Group I Net WAC Rate (stated as a monthly rate) after giving
effect to amounts to be distributed and Realized Losses to be allocated on
such Distribution Date.
α = (Y2 + Y3)/P0. The initial value of α on the Closing Date for use
on the first Distribution Date shall be 0.0001.
γ0 = the lesser of (A) the sum for all Classes of Class I-A
Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group I Net WAC Rate, if applicable) for such Class
applicable for distributions to be made on such Distribution Date and (ii)
the aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses on the prior Distribution
Date and (B) R0*P0.
γ1 = the lesser of (A) the sum for all Classes of Class I-A
Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group I Net WAC Rate, if applicable) for such Class
applicable for distributions to be made on the next succeeding Distribution
Date and (ii) the aggregate Certificate Principal Balance for such Class
after distributions and the allocation of Realized Losses to be made on such
Distribution Date and (B) R1*P1.
Then, based on the foregoing definitions:
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4;
ΔY2 = (α/2){( γ0R1 - γ1R0)/R0R1};
ΔY3 = αΔP - ΔY2; and
ΔY4 = ΔY3.
if both ΔY2 and ΔY3, as so determined, are non-negative numbers.
Otherwise:
(1) If ΔY2, as so determined, is negative, then
ΔY2 = 0;
ΔY3 = α{γ1R0P0 - γ0R1P1}/{γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
(2) If ΔY3, as so determined, is negative, then
ΔY3 = 0;
ΔY2 = α{γ1R0P0 - γ0R1P1}/{2R1R0P1 - γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
Y5 = the aggregate principal balance of the REMIC II Regular Interests
LT5 and LT-Y2 after distributions on the prior Distribution Date.
Y6 = the principal balance of the REMIC II Regular Interest LT6 after
distributions on the prior Distribution Date.
Y7 = the principal balance of the REMIC II Regular Interest LT7 after
distributions on the prior Distribution Date.
Y8 = the principal balance of the REMIC II Regular Interest LT8 after
distributions on the prior Distribution Date (note: Y7 = Y8).
ΔY5 = the aggregate of the REMIC II Regular Interest LT5 and LT-Y-2
Principal Reduction Amounts. Such amount shall be allocated first to
REMIC II Regular Interest LT-Y2 up to the REMIC II Regular Interest LT-Y-2
Principal Reduction Amount and thereafter the remainder shall be allocated to
REMIC II Regular Interest LT5.
ΔY6 = the REMIC II Regular Interest LT6 Principal Reduction Amount.
ΔY7 = the REMIC II Regular Interest LT7 Principal Reduction Amount.
ΔY8 = the REMIC II Regular Interest LT8 Principal Reduction Amount.
Q0 = the aggregate principal balance of the REMIC II Regular Interests
LT5, LT6, LT7, LT8 and LT-Y-2 after distributions and the allocation of
Realized Losses on the prior Distribution Date.
Q1 = the aggregate principal balance of the REMIC II Regular Interests
LT5, LT6, LT7, LT8 and LT-Y2 after distributions and the allocation of
Realized Losses to be made on such Distribution Date.
ΔQ = Q0 - Q1 = the aggregate of the REMIC II Regular Interest LT5,
LT6, LT7, LT8 and LT-Y2 Principal Reduction Amounts, which
= the aggregate of the principal portions of Realized Losses
to be allocated, and the principal distributions to be made with respect to
the Mortgage Loans in Loan Group II on such Distribution Date (including
principal distributed in respect of accrued and unpaid interest on the Class
B-IO Certificates for prior Distribution Dates).
S0 = the Group II Net WAC Rate (stated as a monthly rate) after giving
effect to amounts distributed and Realized Losses allocated on the prior
Distribution Date.
S1 = the Group II Net WAC Rate (stated as a monthly rate) after giving
effect to amounts to be distributed and Realized Losses to be allocated on
such Distribution Date.
β = (Y6 + Y7)/Q0. The initial value of β on the Closing Date for use
on the first Distribution Date shall be 0.0001.
Γ0 = the lesser of (A) the sum for all Classes of Class II-A
Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group II Net WAC Rate, if applicable) for such Class
applicable for distributions to be made on such Distribution Date and (ii)
the aggregate Certificate Principal Balance for such Class after
distributions and the allocation of Realized Losses on the prior Distribution
Date and (B) S0*Q0.
Γ1 = the lesser of (A) the sum for all Classes of Class II-A
Certificates of the product for each Class of (i) the monthly interest rate
(as limited by the Group II Net WAC Rate, if applicable) for such Class
applicable for distributions to be made on the next succeeding Distribution
Date and (ii) the aggregate Certificate Principal Balance for such Class
after distributions and the allocation of Realized Losses to be made on such
Distribution Date and (B) S1*Q1.
Then, based on the foregoing definitions:
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8;
ΔY6 = (β/2){(Γ0S1 - Γ1S0)/S0S1};
ΔY7 = βΔQ - ΔY6; and
ΔY8 = ΔY7.
if both ΔY6 and ΔY7, as so determined, are non-negative numbers.
Otherwise:
(1) If ΔY6, as so determined, is negative, then
ΔY6 = 0;
ΔY7 = β{Γ1S0Q0 - Γ0S1Q1}/{Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
(2) If ΔY7, as so determined, is negative, then
ΔY7 = 0;
ΔY6 = β{Γ1S0Q0 - Γ0S1Q1}/{2S1S0Q1 - Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
REMIC II Realized Loss: Realized Losses on Mortgage Loans shall be
allocated to the REMIC II Regular Interests as follows: (1) The interest
portion of Realized Losses on Mortgage Loans in Loan Group I, if any, shall
be allocated among the REMIC II Regular Interests LT1, LT2, LT4 and LT-Y1 pro
rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof and (2) the interest portion of Realized Losses on Mortgage
Loans in Loan Group II, if any, shall be allocated among the REMIC II Regular
Interests LT5, LT6, LT8 and LT-Y2 pro rata according to the amount of
interest accrued but unpaid thereon, in reduction thereof. Any interest
portion of such Realized Losses in excess of the amount allocated pursuant to
the preceding sentence shall be treated as a principal portion of Realized
Losses not attributable to any specific Mortgage Loan in such Loan Group and
allocated pursuant to the succeeding sentences. The principal portion of
Realized Losses with respect to Loan Group I and Loan Group II shall be
allocated to the REMIC II Regular Interests as follows: (1) The principal
portion of Realized Losses on Mortgage Loans in Loan Group I shall be
allocated, first, to the REMIC II Regular Interest LT-Y1 to the extent that
such losses were allocated to the REMIC I Y-1 Regular Interest in reduction
of the Uncertificated Principal Balance thereof, second, to the REMIC II
Regular Interests LT2, LT3 and LT4 pro-rata according to their respective
REMIC II Principal Reduction Amounts to the extent thereof in reduction of
the Uncertificated Principal Balance of such REMIC II Regular Interests and,
third, the remainder, if any, of such principal portion of such Realized
Losses shall be allocated to the REMIC II Regular Interest LT1 in reduction
of the Uncertificated Principal Balance thereof and (2) the principal portion
of Realized Losses on Mortgage Loans in Loan Group II shall be allocated,
first, to the REMIC II Regular Interest LT-Y2 to the extent that such losses
were allocated to the REMIC I Y-2 Regular Interest in reduction of the
Uncertificated Principal Balance thereof, second, to the REMIC II Regular
Interests LT6, LT7 and LT8 pro-rata according to their respective REMIC II
Principal Reduction Amounts to the extent thereof in reduction of the
Uncertificated Principal Balance of such REMIC II Regular Interests and,
third, the remainder, if any, of such principal portion of such Realized
Losses shall be allocated to the REMIC II Regular Interest LT5 in reduction
of the Uncertificated Principal Balance thereof.
REMIC II Regular Interests: REMIC II Regular Interest LT1, REMIC II
Regular Interest LT2, REMIC II Regular Interest LT3, REMIC II Regular
Interest LT4, REMIC II Regular Interest LT5, REMIC II Regular Interest LT6,
REMIC II Regular Interest LT7, REMIC II Regular Interest LT8, REMIC II
Regular Interest LT-Y1 and REMIC II Regular Interest LT-Y2.
REMIC II Regular Interest LT1: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT1
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT1 on such Distribution
Date.
REMIC II Regular Interest LT2: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT2
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT2 on such Distribution
Date.
REMIC II Regular Interest LT3: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT3 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT3
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT3 on such Distribution
Date.
REMIC II Regular Interest LT4: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT4 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT4
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT4 on such Distribution
Date.
REMIC II Regular Interest LT5: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT5 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT5
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT5 on such Distribution
Date.
REMIC II Regular Interest LT6: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT6 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT6
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT6 on such Distribution
Date.
REMIC II Regular Interest LT7: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT7 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT7
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT7 on such Distribution
Date.
REMIC II Regular Interest LT8: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT8 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT8
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT8 on such Distribution
Date.
REMIC II Regular Interest LT-Y1: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT-Y1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT-Y1
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT-Y1 on such Distribution
Date.
REMIC II Regular Interest LT-Y2: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.
REMIC II Regular Interest LT-Y2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT-Y2
Principal Reduction Amount for such Distribution Date over the Realized
Losses allocated to the REMIC II Regular Interest LT-Y2 on such Distribution
Date.
REMIC III: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC II Regular Interests.
REMIC III Regular Interests: As defined in Section 5.01(c).
REMIC III Realized Losses: Realized Losses allocated to and in
reduction of the Overcollateralization Amount shall be deemed to first reduce
the principal balance of the REMIC III Regular Interest B-IO-P until such
balance shall have been reduced to zero and thereafter to reduce the accrued
and unpaid interest on the REMIC III Regular Interest B-IO-I. Realized
Losses allocated to the Certificates in reduction of the interest or
principal attributes thereof shall be deemed allocated to the Corresponding
REMIC III Regular Interests in reduction of the corresponding attributes
thereof.
REMIC Opinion: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions,
(i) cause any 2004-10 REMIC to fail to qualify as a REMIC while any regular
interest in such 2004-10 REMIC is outstanding, (ii) result in a tax on
prohibited transactions with respect to any 2004-10 REMIC or (iii) constitute
a taxable contribution to any 2004-10 REMIC after the Startup Day.
REMIC Provisions: The provisions of the federal income tax law relating
to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing
may be in effect from time to time.
REO Property: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased by the Seller
pursuant to the Mortgage Loan Purchase Agreement or Article II of this
Agreement, an amount equal to the excess of (i) the sum of (a) 100% of the
Outstanding Principal Balance of such Mortgage Loan as of the date of
repurchase (or if the related Mortgaged Property was acquired with respect
thereto, 100% of the Outstanding Principal Balance at the date of the
acquisition), (b) accrued but unpaid interest on the Outstanding Principal
Balance at the related Mortgage Interest Rate, through and including the last
day of the month of repurchase and (c) any costs and damages (if any)
incurred by the Trust in connection with any violation of such Mortgage Loan
of any predatory or abusive lending laws over (ii) any portion of the Master
Servicing Compensation, Monthly Advances and advances payable to the
purchaser of the Mortgage Loan.
Repurchase Proceeds: the Repurchase Price in connection with any
repurchase of a Mortgage Loan by the Seller and any cash deposit in
connection with the substitution of a Mortgage Loan.
Request for Release: A request for release in the form attached hereto
as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under
this Agreement with respect to such Mortgage Loan.
Reserve Fund: The separate trust account created and maintained by the
Trustee pursuant to Section 4.06 hereof.
Residual Certificates: Any of the Class R Certificates.
Responsible Officer: Any officer assigned to the Corporate Trust Office
(or any successor thereto), including any Vice President, Assistant Vice
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement, and any other
officer of the Trustee to whom a matter arising hereunder may be referred.
Rolling Three-Month Delinquency Average: With respect to a Distribution
Date, the average of the Monthly Delinquency Percentages for that
Distribution Date and each of the immediately preceding two Distribution
Dates.
Rule 144A Certificate: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate)
which is a Qualified Institutional Buyer as defined under Rule 144A
promulgated under the Securities Act, substantially in the form set forth as
Exhibit F-2 hereto.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.,
and any successor thereto.
Scheduled Payment: With respect to any Mortgage Loan and any Due
Period, the scheduled payment or payments of principal and interest due
during such Due Period on such Mortgage Loan which either is payable by a
Mortgagor in such Due Period under the related Mortgage Note or, in the case
of REO Property, would otherwise have been payable under the related Mortgage
Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, National Association, and
any successor thereto, or any successor securities administrator appointed as
herein provided.
Securities Legend: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT
AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (2) IN
CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE
ACT OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
THE FORM PROVIDED IN THE AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH
OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
OR IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION. THIS CERTIFICATE MAY NOT
BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT (A "PLAN") THAT IS SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, AND/OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"),
or by a person using "PLAN assets" of a Plan, UNLESS THE PROPOSED TRANSFEREE
PROVIDES THE TRUSTEE WITH AN OPINION OF COUNSEL FOR THE BENEFIT OF THE
TRUSTEE, MASTER SERVICER AND THE SECURITIES ADMINISTRATOR AND ON WHICH THEY
MAY RELY WHICH IS SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975
OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE TRUSTEE OR THE
SECURITIES ADMINISTRATOR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT.
Security Instrument: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed,
including any riders or addenda thereto.
Seller: EMC, as Seller under the Mortgage Loan Purchase Agreement.
Senior Certificates: The Class A Certificates.
Senior Enhancement Percentage: As to each Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the sum of (i)
the aggregate of the Certificate Principal Balance of the Class M-1, Class
M-2, Class B-1 and Class B-2 Certificates and (ii) the Overcollateralization
Amount, in each case after taking into account the distribution of the
related Principal Distribution Amounts on such Distribution Date, and the
denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date .
Servicer: With respect to each Mortgage Loan, Chevy Chase, Countrywide,
EMC, GreenPoint, National City, SouthTrust or Xxxxxxxxxx, and any successor
thereto.
Servicer Remittance Date: With respect to each Mortgage Loan, the date
set forth in the related Servicing Agreement.
Servicing Agreements: The Chevy Chase Servicing Agreements, Countrywide
Servicing Agreement, EMC Servicing Agreement, GreenPoint Servicing Agreement,
National City Servicing Agreement, SouthTrust Servicing Agreement and
Xxxxxxxxxx Servicing Agreement.
Servicing Fee: As to any Mortgage Loan and Distribution Date, an amount
equal to the product of (i) the Stated Principal Balance of such Mortgage
Loan for the Distribution Date preceding such Distribution Date and (ii) the
applicable Servicing Fee Rate.
Servicing Fee Rate: As to any Mortgage Loan, a per annum rate as set
forth in the Mortgage Loan Schedule.
SouthTrust: SouthTrust Mortgage Corporation, and its successor in
interest.
SouthTrust Servicing Agreement: The Purchase, Warranties and Servicing
Agreement dated as of November 1, 2002, between EMC and SouthTrust, attached
hereto as Exhibit H-4.
Startup Day: August 31, 2004.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property and any Distribution Date, the Outstanding Principal Balance
thereof as of the Cut-off Date minus the sum of (i) the principal portion of
the Scheduled Payments due with respect to such Mortgage Loan during each Due
Period ending prior to such Distribution Date (and irrespective of any
delinquency in their payment), (ii) all Principal Prepayments with respect to
such Mortgage Loan received prior to or during the related Prepayment Period,
and all Liquidation Proceeds to the extent applied by the related Servicer as
recoveries of principal in accordance with this Agreement or the applicable
Servicing Agreement with respect to such Mortgage Loan, that were received by
the related Servicer as of the close of business on the last day of the
Prepayment Period related to such Distribution Date and (iii) any Realized
Losses on such Mortgage Loan incurred prior to or during the related
Prepayment Period. The Stated Principal Balance of a Liquidated Mortgage Loan
equals zero. References herein to the Stated Principal Balance of a Loan
Group at any time shall mean the aggregate Stated Principal Balance of all
Mortgage Loans in such Loan Group.
Stepdown Date: The earlier to occur of (i) the Distribution Date on
which the Certificate Principal Balance of the Class A Certificates has been
reduced to zero and (ii) the later to occur of (a) the Distribution Date in
September 2007 and (b) the first Distribution Date on which the sum of the
aggregate Certificate Principal Balance of the Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates and the Overcollateralization Amount divided
by the Stated Principal Balance of the Mortgage Loans for such Distribution
Date is greater than or equal to approximately 12.90%.
Subordinate Balance: For each Loan Group, for any Distribution Date,
the excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans in such Loan Group over the aggregate Certificate Principal Balance of
the Class A Certificates related to that Loan Group.
Subordinate Certificates: The Class M-1 Certificates, Class M-2
Certificates, Class B-1 Certificates, Class B-2 Certificates, Class XP
Certificates, Class B-IO Certificates and Residual Certificates.
Subordinate Balance Percentage: For each Loan Group, fraction, stated
as a percentage, whose numerator is the Subordinate Balance for such Loan
Group and whose denominator is the sum of the Subordinate Balances for Loan
Group I and Loan Group II.
Subsequent Recoveries: As of any Distribution Date, amounts received
during the related Due Period by the Master Servicer (net of any related
expenses permitted to be reimbursed pursuant to Section 4.03) or surplus
amounts held by the Master Servicer to cover estimated expenses (including,
but not limited to, recoveries in respect of the representations and
warranties made by the Seller pursuant to the Mortgage Loan Purchase
Agreement) in respect of a Liquidated Mortgage Loan or the disposition of an
REO Property prior to the related Prepayment Period that resulted in a
Realized Loss, after liquidation or disposition of such Mortgage Loan.
Substitute Mortgage Loan: A mortgage loan tendered to the Trustee
pursuant to the related Servicing Agreement, the Mortgage Loan Purchase
Agreement or Section 2.04 of this Agreement, as applicable, in each case, (i)
which has an Outstanding Principal Balance not greater nor materially less
than the Mortgage Loan for which it is to be substituted; (ii) which has a
Mortgage Interest Rate and Net Rate not less than, and not materially greater
than, such Mortgage Loan; (iii) which has a maturity date not materially
earlier or later than such Mortgage Loan and not later than the latest
maturity date of any Mortgage Loan; (iv) which is of the same property type
and occupancy type as such Mortgage Loan; (v) which has a Loan-to-Value Ratio
not greater than the Loan-to-Value Ratio of such Mortgage Loan; (vi) which is
current in payment of principal and interest as of the date of substitution;
(vii) as to which the payment terms do not vary in any material respect from
the payment terms of the Mortgage Loan for which it is to be substituted and
(viii) which has a Gross Margin, Periodic Rate Cap and Maximum Lifetime
Mortgage Rate no less than those of such Mortgage Loan, has the same Index
and interval between Interest Adjustment Dates as such Mortgage Loan, and a
Minimum Lifetime Mortgage Rate no lower than that of such Mortgage Loan.
Substitution Adjustment Amount: The amount, if any, required to be paid
by the Seller to the Trustee for deposit in the Distribution Account pursuant
to Section 2.04 in connection with the substitution of a Mortgage Loan.
Tax Administration and Tax Matters Person: The Securities Administrator
and any successor thereto or assignee thereof shall serve as tax
administrator hereunder and as agent for the Tax Matters Person. The Holder
of the largest percentage interest of each Class of Residual Certificates
shall be the Tax Matters Person for the related REMIC, as more particularly
set forth in Section 9.12 hereof.
Termination Purchase Price: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 10.01.
Trigger Event: A Trigger Event exists with respect to a Distribution
Date on or after the Stepdown Date if either (i) the related Rolling
Three-Month Delinquency Average exceeds 50% of the related Senior Enhancement
Percentage or (ii) the percentage of the cumulative amount of Realized Losses
on the Mortgage Loans as of such date of determination is greater than the
applicable percentage listed below of the aggregate Stated Principal Balances
of the Mortgage Loans as of the Closing Date:
Months Percentage
37 - 48 0.70%
49 - 60 1.10%
61-72 1.45%
73+ 1.70%
Trust Fund or Trust: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).
Trustee: JPMorgan Chase Bank, and any successor thereto, or any
successor trustee appointed as herein provided.
2004-10 REMIC: Any of REMIC I, REMIC II and REMIC III.
Uncertificated Accrued Interest: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the
related Uncertificated Pass-Through Rate for such Distribution Date, accrued
on the Uncertificated Principal Balance or Uncertificated Notional Amount, as
applicable, immediately prior to such Distribution Date. Uncertificated
Accrued Interest for the Uncertificated Regular Interests shall accrue on the
basis of a 360-day year consisting of twelve 30-day months. For purposes of
calculating the amount of Uncertificated Accrued Interest for the REMIC I
Regular Interests for any Distribution Date, any Prepayment Interest
Shortfalls and Relief Act Shortfalls (to the extent not covered by
Compensating Interest) (i) relating to the Mortgage Loans in Loan Group I for
any Distribution Date shall be allocated among REMIC I Regular Interests Y-1
and Z-1 and (ii) relating to the Mortgage Loans in Loan Group II for any
Distribution Date shall be allocated among REMIC I Regular Interests Y-2 and
Z-2, pro rata, based on, and to the extent of, Uncertificated Accrued
Interest, as calculated without application of this sentence. For purposes
of calculating the amount of Uncertificated Accrued Interest for the REMIC II
Regular Interests for any Distribution Date, any Prepayment Interest
Shortfalls and Relief Act Shortfalls (to the extent not covered by
Compensating Interest) (i) relating to the Mortgage Loans in Loan Group I for
any Distribution Date shall be allocated among REMIC II Regular Interests
LT1, LT2, LT3, LT4 and LT-Y1 and (ii) relating to the Mortgage Loans in Loan
Group II for any Distribution Date shall be allocated among REMIC II Regular
Interests LT5, LT6, LT7, LT8 and LT-Y2, pro rata, based on, and to the extent
of, Uncertificated Accrued Interest, as calculated without application of
this sentence.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate or the Uncertificated REMIC II Pass-Through Rate, as the
case may be.
Uncertificated Principal Balance: With respect to each REMIC Regular
Interest, the principal amount of such REMIC Regular Interest outstanding as
of any date of determination. As of the Closing Date, the Uncertificated
Principal Balance of each REMIC Regular Interest shall equal the amount set
forth in the Section 5.01 as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each such
REMIC Regular Interest shall be reduced by all distributions of principal
made on such REMIC Regular Interest on such Distribution Date pursuant to
Section 5.01 and shall be further reduced on such Distribution Date by
Realized Losses as provided by the definitions of REMIC I Realized Losses and
REMIC II Realized Losses. The Uncertificated Principal Balance of each REMIC
Regular Interest shall never be less than zero.
Uncertificated REMIC I Pass-Through Rate: With respect to any
Distribution Date and (i) REMIC I Regular Interest Y-1 and REMIC I Regular
Interest Z-1, the weighted average of the Net Rates of the Mortgage Loans in
Loan Group I and (ii) REMIC I Regular Interest Y-2 and REMIC I Regular
Interest Z-2, the weighted average of the Net Rates of the Mortgage Loans in
Loan Group II.
Uncertificated REMIC II Pass-Through Rate: With respect to any
Distribution Date and (i) REMIC II Regular Interests LT1, LT2 and LT-Y1, the
weighted average of the Net Rates of the Mortgage Loans in Loan Group I, (ii)
REMIC II Regular Interests LT5, LT6 and LT-Y2, the weighted average of the
Net Rates of the Mortgage Loans in Loan Group II, (iii) REMIC II Regular
Interests LT3 and LT7, zero (0.00%), (v) REMIC II Regular Interest LT4, twice
the weighted average of the Net Rates of the Mortgage Loans in Loan Group I
and (vi) REMIC II Regular Interest LT8, twice the weighted average of the Net
Rates of the Mortgage Loans in Loan Group II.
Uninsured Cause: Any cause of damage to a Mortgaged Property or related
REO Property such that the complete restoration of such Mortgaged Property or
related REO Property is not fully reimbursable by the hazard insurance
policies required to be maintained pursuant the related Servicing Agreement,
without regard to whether or not such policy is maintained.
United States Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or
under the laws of, the United States or any state thereof or the District of
Columbia (except, in the case of a partnership, to the extent provided in
regulations), provided that, for purposes solely of the Class R Certificates,
no partnership or other entity treated as a partnership for United States
federal income tax purposes shall be treated as a United States Person unless
all persons that own an interest in such partnership either directly or
through any entity that is not a corporation for United States federal income
tax purposes are United States Persons, or an estate whose income is subject
to United States federal income tax regardless of its source, or a trust if a
court within the United States is able to exercise primary supervision over
the administration of the trust and one or more such United States Persons
have the authority to control all substantial decisions of the trust. To the
extent prescribed in regulations by the Secretary of the Treasury, which have
not yet been issued, a trust which was in existence on August 20, 1996 (other
than a trust treated as owned by the grantor under subpart E of part I of
subchapter J of chapter 1 of the Code), and which was treated as a United
States person on August 20, 1996 may elect to continue to be treated as a
United States person notwithstanding the previous sentence.
Unpaid Realized Loss Amount: With respect to any Distribution Date and
a Class of Offered Certificates, is the excess of (i) Applied Realized Loss
Amounts with respect to such Class over (ii) the sum of all distributions in
reduction of the Applied Realized Loss Amounts on all previous Distribution
Dates. Any amounts distributed to a class of Offered Certificates in respect
of any Unpaid Realized Loss Amount will not be applied to reduce the
Certificate Principal Balance of such Class.
Xxxxx Fargo: Xxxxx Fargo Bank, N.A., as successor by merger to Xxxxx
Fargo Home Mortgage, Inc., and its successor in interest.
Xxxxx Fargo Servicing Agreement: The Master Seller's Warranties and
Servicing Agreement, dated as of April 1, 2003, as amended by the First
Amendment to the Master Seller's Warranties and Servicing Agreement, dated
May 10, 2004, between Xxxxx Fargo and EMC as attached hereto as Exhibit H-5.
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01 Conveyance of Mortgage Loans to Trustee. (a)The Depositor
concurrently with the execution and delivery of this Agreement, sells,
transfers and assigns to the Trust without recourse all its right, title and
interest in and to (i) the Mortgage Loans identified in the applicable
Mortgage Loan Schedule, including all interest and principal due with respect
to the Mortgage Loans after the Cut-off Date, but excluding any payments of
principal and interest due on or prior to the Cut-off Date; (ii) such assets
as shall from time to time be credited or are required by the terms of this
Agreement to be credited to the Master Servicer Collection Account, (iii)
such assets relating to the Mortgage Loans as from time to time may be held
by the Servicers in Protected Accounts, the Master Servicer in the Master
Servicer Collection Account and the Trustee in the Distribution Account for
the benefit of the Trustee on behalf of the Certificateholders, (iv) any REO
Property, (v) the Required Insurance Policies and any amounts paid or payable
by the insurer under any Insurance Policy (to the extent the mortgagee has a
claim thereto), (vi) the Mortgage Loan Purchase Agreement to the extent
provided in Section 2.03(a), (vii) the rights with respect to the Servicing
Agreements as assigned to the Trustee on behalf of the Certificateholders by
the Assignment Agreements, (viii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Distribution Account and (ix) any proceeds of the foregoing. Although it is
the intent of the parties to this Agreement that the conveyance of the
Depositor's right, title and interest in and to the Mortgage Loans and other
assets in the Trust Fund pursuant to this Agreement shall constitute a
purchase and sale and not a loan, in the event that such conveyance is deemed
to be a loan, it is the intent of the parties to this Agreement that the
Depositor shall be deemed to have granted to the Trustee a first priority
perfected security interest in all of the Depositor's right, title and
interest in, to and under the Mortgage Loans and other assets in the Trust
Fund, and that this Agreement shall constitute a security agreement under
applicable law.
(b) In connection with the above transfer and assignment, the Depositor
hereby deposits with the Trustee or the Custodian, as its agent, with respect
to each Mortgage Loan:
(i) the original Mortgage Note, endorsed without recourse to the order of
the Trustee and showing an unbroken chain of endorsements from the
original payee thereof to the Person endorsing it to the Trustee, or
lost note affidavit together with a copy of the related Mortgage Note;
(ii) the original Mortgage and, if the related Mortgage Loan is a MOM Loan,
noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the
original is not available, a copy), with evidence of such recording
indicated thereon (or if clause (X) in the proviso below applies, shall
be in recordable form);
(iii) unless the Mortgage Loan is a MOM Loan, a certified copy of the
assignment (which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is
located) to "JPMorgan Chase Bank, as Trustee", with evidence of
recording with respect to each Mortgage Loan in the name of the Trustee
thereon (or if clause (X) in the proviso below applies or for Mortgage
Loans with respect to which the related Mortgaged Property is located
in a state other than Maryland, Tennessee, South Carolina, Mississippi
and Florida, or an Opinion of Counsel has been provided as set forth in
this Section 2.01(b), shall be in recordable form);
(iv) all intervening assignments of the Security Instrument, if applicable
and only to the extent available to the Depositor with evidence of
recording thereon;
(v) the original or a copy of the policy or certificate of primary mortgage
guaranty insurance, to the extent available, if any;
(vi) the original policy of title insurance or mortgagee's certificate of
title insurance or commitment or binder for title insurance; and
(vii) originals of all modification agreements, if applicable and available;
provided, however, that in lieu of the foregoing, the Depositor may deliver
the following documents, under the circumstances set forth below: (X) in lieu
of the original Security Instrument, assignments to the Trustee or
intervening assignments thereof which have been delivered, are being
delivered or will, upon receipt of recording information relating to the
Security Instrument required to be included thereon, be delivered to
recording offices for recording and have not been returned to the Depositor
in time to permit their delivery as specified above, the Depositor may
deliver a true copy thereof with a certification by the Depositor, on the
face of such copy, substantially as follows: "Certified to be a true and
correct copy of the original, which has been transmitted for recording"; (Y)
in lieu of the Security Instrument, assignment to the Trustee or intervening
assignments thereof, if the applicable jurisdiction retains the originals of
such documents (as evidenced by a certification from the Depositor to such
effect) the Depositor may deliver photocopies of such documents containing an
original certification by the judicial or other governmental authority of the
jurisdiction where such documents were recorded; and (Z) the Depositor shall
not be required to deliver intervening assignments or Mortgage Note
endorsements between the related underlying seller of the Mortgage Loans and
EMC, between EMC and the Depositor, and between the Depositor and the
Trustee; and provided, further, however, that in the case of Mortgage Loans
which have been prepaid in full after the Cut-off Date and prior to the
Closing Date, the Depositor, in lieu of delivering the above documents, may
deliver to the Trustee or the Custodian, as its agent, a certification to
such effect and shall deposit all amounts paid in respect of such Mortgage
Loans in the Master Servicer Collection Account on the Closing Date. The
Depositor shall deliver such original documents (including any original
documents as to which certified copies had previously been delivered) to the
Trustee or the Custodian, as its agent, promptly after they are received. The
Depositor shall cause, at its expense, the assignment of the Security
Instrument to the Trustee to be recorded not later than 180 days after the
Closing Date unless such (a) recordation is not required by the Rating
Agencies or an Opinion of Counsel has been provided to the Trustee (with a
copy to the Custodian) which states that recordation of such Security
Instrument is not required to protect the interests of the Certificateholders
in the related Mortgage Loans or (b) MERS is identified on the Mortgage or on
a properly recorded assignment of the Mortgage as the mortgagee of record
solely as nominee for Depositor and its successor and assigns; provided,
however, that each assignment shall be submitted for recording by the
Depositor in the manner described above, at no expense to the Trust or the
Trustee or the Custodian, as its agent, upon the earliest to occur of: (i)
reasonable direction by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust, (ii) the
occurrence of an Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Depositor and (iv) the occurrence
of a servicing transfer as described in Section 8.02 hereof. Notwithstanding
the foregoing, if the Depositor fails to pay the cost of recording the
assignments, such expense will be paid by the Trustee and the Trustee shall
be reimbursed for such expenses by the Trust in accordance with Section 9.05.
Section 2.02 Acceptance of Mortgage Loans by Trustee. (a)The Trustee
acknowledges the sale, transfer and assignment of the Trust to it by the
Depositor and receipt of, subject to further review and the exceptions which
may be noted pursuant to the procedures described below, and declares that it
holds, the documents (or certified copies thereof) delivered to it pursuant
to Section 2.01, and declares that it will continue to hold those documents
and any amendments, replacements or supplements thereto and all other assets
of the Trust Fund delivered to it as Trustee in trust for the use and benefit
of all present and future Holders of the Certificates. On the Closing Date,
the Custodian, with respect to the Mortgage Loans, shall acknowledge with
respect to each Mortgage Loan by an Initial Certification receipt of the
Mortgage File, but without review of such Mortgage File, except to the extent
necessary to confirm that such Mortgage File contains the related Mortgage
Note or lost note affidavit. No later than 90 days after the Closing Date (or
with respect to any Substitute Mortgage Loan, within five Business Days after
the receipt by the Trustee or Custodian thereof), the Trustee agrees, for the
benefit of the Certificateholders, to review or cause to be reviewed by the
Custodian on its behalf (under the Custodial Agreement), each Mortgage File
delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Depositor and the Trustee an Interim Certification. In
conducting such review, the Trustee or Custodian will ascertain whether all
required documents have been executed and received, and based on the Mortgage
Loan Schedule, whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans it has received, as identified in the Mortgage Loan Schedule. In
performing any such review, the Trustee or the Custodian, as its agent, may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Trustee or the Custodian, as its agent, finds any document constituting part
of the Mortgage File not to have been executed or received, or to be
unrelated to the Mortgage Loans identified in Exhibit B, or to appear to be
defective on its face, the Trustee or the Custodian, as its agent, shall
promptly notify the Seller. In accordance with the Mortgage Loan Purchase
Agreement, the Seller shall correct or cure any such defect within ninety
days from the date of notice from the Trustee or the Custodian, as its agent,
of the defect and if the Seller fails to correct or cure the defect within
such period, and such defect materially and adversely affects the interests
of the Certificateholders in the related Mortgage Loan, the Trustee or the
Custodian, as its agent, shall enforce the Seller's obligation pursuant to
the Mortgage Loan Purchase Agreement within 90 days from the Trustee's or the
Custodian's notification, to purchase such Mortgage Loan at the Repurchase
Price; provided that, if such defect would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from the date
such breach was discovered; provided, however, that if such defect relates
solely to the inability of the Seller to deliver the original Security
Instrument or intervening assignments thereof, or a certified copy because
the originals of such documents, or a certified copy have not been returned
by the applicable jurisdiction, the Seller shall not be required to purchase
such Mortgage Loan if the Seller delivers such original documents or
certified copy promptly upon receipt, but in no event later than 360 days
after the Closing Date. The foregoing repurchase obligation shall not apply
in the event that the Seller cannot deliver such original or copy of any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that the Seller shall instead deliver a recording receipt of
such recording office or, if such receipt is not available, a certificate
confirming that such documents have been accepted for recording, and delivery
to the Trustee or the Custodian, as its agent, shall be effected by the
Seller within thirty days of its receipt of the original recorded document.
(b) No later than 180 days after the Closing Date (or with respect to any
Substitute Mortgage Loan, within five Business Days after the receipt by the
Trustee or the Custodian thereof), the Trustee or the Custodian, as its
agent, will review, for the benefit of the Certificateholders, the Mortgage
Files delivered to it and will execute and deliver or cause to be executed
and delivered to the Depositor and the Trustee a Final Certification. In
conducting such review, the Trustee or the Custodian, as its agent, will
ascertain whether an original of each document required to be recorded has
been returned from the recording office with evidence of recording thereon or
a certified copy has been obtained from the recording office. If the Trustee
or the Custodian, as its agent, finds any document constituting part of the
Mortgage File has not been received, or to be unrelated, determined on the
basis of the Mortgagor name, original principal balance and loan number, to
the Mortgage Loans identified in Exhibit B, or to appear defective on its
face (a "Material Defect"), the Trustee or the Custodian, as its agent, shall
promptly notify the Seller (provided, however, that with respect to those
documents described in Sections 2.01(b)(iv), (v) and (vii), the Trustee's
obligations shall extend only to the documents actually delivered pursuant to
such Sections). In accordance with the Mortgage Loan Purchase Agreement, the
Seller shall correct or cure any such defect within 90 days from the date of
notice from the Trustee or the Custodian, as its agent, of the Material
Defect and if the Seller is unable to cure such defect within such period,
and if such defect materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the Trustee shall enforce
the Seller's obligation under the Mortgage Loan Purchase Agreement to provide
a Substitute Mortgage Loan (if within two years of the Closing Date) or
purchase such Mortgage Loan at the Repurchase Price; provided, however, that
if such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure,
repurchase or substitution must occur within 90 days from the date such
breach was discovered; provided, further, that if such defect relates solely
to the inability of the Seller to deliver the original Security Instrument or
intervening assignments thereof, or a certified copy, because the originals
of such documents or a certified copy, have not been returned by the
applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan, if the Seller delivers such original documents or certified
copy promptly upon receipt, but in no event later than 360 days after the
Closing Date.
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with Sections 2.02(a) or (b) above, the Seller shall remit to the
Master Servicer the Repurchase Price for deposit in the Master Servicer
Collection Account and the Seller shall provide to the Trustee written
notification detailing the components of the Repurchase Price. Upon deposit
of the Repurchase Price in the Master Servicer Collection Account, the
Depositor shall notify the Trustee and the Trustee or the Custodian, as its
agent (upon receipt of a Request for Release in the form of Exhibit D
attached hereto with respect to such Mortgage Loan), shall release to the
Seller the related Mortgage File and the Trustee shall execute and deliver
all instruments of transfer or assignment, without recourse, representation
or warranty, furnished to it by the Seller as are necessary to vest in the
Seller title to and rights under the Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which the Repurchase Price in
available funds is received by the Trustee. The Trustee shall amend the
Mortgage Loan Schedule, which was previously delivered to it by the Depositor
in a form agreed to between the Depositor and the Trustee, to reflect such
repurchase and shall promptly notify the Rating Agencies and the Master
Servicer of such amendment. The obligation of the Seller to repurchase any
Mortgage Loan as to which such a defect in a constituent document exists
shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.
Section 2.03 Assignment of Interest in the Mortgage Loan Purchase
Agreement. (a)The Depositor hereby assigns to the Trustee, on behalf of the
Certificateholders, all of its right, title and interest in the Mortgage Loan
Purchase Agreement, including but not limited to Depositor's rights and
obligations pursuant to the Servicing Agreements (noting that the Seller has
retained the right in the event of breach of the representations, warranties
and covenants, if any, with respect to the related Mortgage Loans of the
related Servicer under the related Servicing Agreement to enforce the
provisions thereof and to seek all or any available remedies). The
obligations of the Seller to substitute or repurchase, as applicable, a
Mortgage Loan shall be the Trustee's and the Certificateholders' sole remedy
for any breach thereof. At the request of the Trustee, the Depositor shall
take such actions as may be necessary to enforce the above right, title and
interest on behalf of the Trustee and the Certificateholders or shall execute
such further documents as the Trustee may reasonably require in order to
enable the Trustee to carry out such enforcement.
(b) If the Depositor, the Master Servicer or the Trustee discovers a breach
of any of the representations and warranties set forth in the Mortgage Loan
Purchase Agreement, which breach materially and adversely affects the value
of the interests of Certificateholders or the Trustee in the related Mortgage
Loan, the party discovering the breach shall give prompt written notice of
the breach to the other parties. The Seller, within 90 days of its discovery
or receipt of notice that such breach has occurred (whichever occurs
earlier), shall cure the breach in all material respects or, subject to the
Mortgage Loan Purchase Agreement or Section 2.04 of this Agreement, as
applicable, shall purchase the Mortgage Loan or any property acquired with
respect thereto from the Trustee; provided, however, that if there is a
breach of any representation set forth in the Mortgage Loan Purchase
Agreement, and the Mortgage Loan or the related property acquired with
respect thereto has been sold, then the Seller shall pay, in lieu of the
Repurchase Price, any excess of the Repurchase Price over the Net Liquidation
Proceeds received upon such sale. If the Net Liquidation Proceeds exceed the
Repurchase Price, any excess shall be paid to the Seller to the extent not
required by law to be paid to the borrower. Any such purchase by the Seller
shall be made by providing an amount equal to the Repurchase Price to the
Master Servicer for deposit in the Master Servicer Collection Account and
written notification detailing the components of such Repurchase Price. The
Depositor shall notify the Trustee and submit to the Trustee or the
Custodian, as its agent, a Request for Release, and the Trustee shall
release, or the Trustee shall cause the Custodian to release, to the Seller
the related Mortgage File and the Trustee shall execute and deliver all
instruments of transfer or assignment furnished to it by the Seller, without
recourse, representation or warranty as are necessary to vest in the Seller
title to and rights under the Mortgage Loan or any property acquired with
respect thereto. Such purchase shall be deemed to have occurred on the date
on which the Repurchase Price in available funds is received by the Trustee.
The Securities Administrator shall amend the Mortgage Loan Schedule to
reflect such repurchase and shall promptly notify the Trustee and the Rating
Agencies of such amendment. Enforcement of the obligation of the Seller to
purchase (or substitute a Substitute Mortgage Loan for) any Mortgage Loan or
any property acquired with respect thereto (or pay the Repurchase Price as
set forth in the above proviso) as to which a breach has occurred and is
continuing shall constitute the sole remedy respecting such breach available
to the Certificateholders or the Trustee on their behalf.
Section 2.04 Substitution of Mortgage Loans. Notwithstanding anything to
the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to the Mortgage Loan Purchase Agreement or Sections 2.02 or 2.03 of
this Agreement, the Seller may, no later than the date by which such purchase
by the Seller would otherwise be required, tender to the Trustee a Substitute
Mortgage Loan accompanied by a certificate of an authorized officer of the
Seller that such Substitute Mortgage Loan conforms to the requirements set
forth in the definition of "Substitute Mortgage Loan" in the Mortgage Loan
Purchase Agreement or this Agreement, as applicable; provided, however, that
substitution pursuant to the Mortgage Loan Purchase Agreement or this Section
2.04, as applicable, in lieu of purchase shall not be permitted after the
termination of the two-year period beginning on the Startup Day; provided,
further, that if the breach would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such
cure or substitution must occur within 90 days from the date the breach was
discovered. The Trustee or the Custodian, as its agent, shall examine the
Mortgage File for any Substitute Mortgage Loan in the manner set forth in
Section 2.02(a) and the Trustee or the Custodian, as its agent, shall notify
the Seller, in writing, within five Business Days after receipt, whether or
not the documents relating to the Substitute Mortgage Loan satisfy the
requirements of the fourth sentence of Section 2.02(a). Within two Business
Days after such notification, the Seller shall provide to the Trustee for
deposit in the Distribution Account the amount, if any, by which the
Outstanding Principal Balance as of the next preceding Due Date of the
Mortgage Loan for which substitution is being made, after giving effect to
Scheduled Principal due on such date, exceeds the Outstanding Principal
Balance as of such date of the Substitute Mortgage Loan, after giving effect
to Scheduled Principal due on such date, which amount shall be treated for
the purposes of this Agreement as if it were the payment by the Seller of the
Repurchase Price for the purchase of a Mortgage Loan by the Seller. After
such notification to the Seller and, if any such excess exists, upon receipt
of such deposit, the Trustee shall accept such Substitute Mortgage Loan which
shall thereafter be deemed to be a Mortgage Loan hereunder. In the event of
such a substitution, accrued interest on the Substitute Mortgage Loan for the
month in which the substitution occurs and any Principal Prepayments made
thereon during such month shall be the property of the Trust Fund and accrued
interest for such month on the Mortgage Loan for which the substitution is
made and any Principal Prepayments made thereon during such month shall be
the property of the Seller. The Scheduled Principal on a Substitute Mortgage
Loan due on the Due Date in the month of substitution shall be the property
of the Seller and the Scheduled Principal on the Mortgage Loan for which the
substitution is made due on such Due Date shall be the property of the Trust
Fund. Upon acceptance of the Substitute Mortgage Loan (and delivery to the
Trustee or Custodian of a Request for Release for such Mortgage Loan), the
Trustee shall release to the Seller the related Mortgage File related to any
Mortgage Loan released pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, and shall execute and deliver
all instruments of transfer or assignment, without recourse, representation
or warranty in form as provided to it as are necessary to vest in the Seller
title to and rights under any Mortgage Loan released pursuant to the Mortgage
Loan Purchase Agreement or Section 2.04 of this Agreement, as applicable. The
Seller shall deliver the documents related to the Substitute Mortgage Loan in
accordance with the provisions of the Mortgage Loan Purchase Agreement or
Sections 2.01(b) and 2.02(b) of this Agreement, as applicable, with the date
of acceptance of the Substitute Mortgage Loan deemed to be the Closing Date
for purposes of the time periods set forth in such Sections. The
representations and warranties set forth in the Mortgage Loan Purchase
Agreement shall be deemed to have been made by the Seller with respect to
each Substitute Mortgage Loan as of the date of acceptance of such Mortgage
Loan by the Trustee. The Master Servicer shall amend the Mortgage Loan
Schedule to reflect such substitution and shall provide a copy of such
amended Mortgage Loan Schedule to the Trustee and the Rating Agencies.
Section 2.05 Issuance of Certificates. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the
Trust Fund and, concurrently therewith, has signed, and countersigned and
delivered to the Depositor, in exchange therefor, Certificates in such
authorized denominations representing such Fractional Undivided Interests as
the Depositor has requested. The Trustee agrees that it will hold the
Mortgage Loans and such other assets as may from time to time be delivered to
it segregated on the books of the Trustee in trust for the benefit of the
Certificateholders.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor
in and to the REMIC II Regular Interests and the other assets of REMIC III
for the benefit of the holders of the REMIC III Certificates. The Trustee
acknowledges receipt of the REMIC II Regular Interests (which are
uncertificated) and the other assets of REMIC III and declares that it holds
and will hold the same in trust for the exclusive use and benefit of the
holders of the REMIC III Certificates.
Section 2.06 Representations and Warranties Concerning the Depositor.
The Depositor hereby represents and warrants to the Trustee, the Master
Servicer and the Securities Administrator as follows:
(1) the Depositor (a) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and (b)
is qualified and in good standing as a foreign corporation to do
business in each jurisdiction where such qualification is
necessary, except where the failure so to qualify would not
reasonably be expected to have a material adverse effect on the
Depositor's business as presently conducted or on the Depositor's
ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(2) the Depositor has full corporate power to own its property, to carry on
its business as presently conducted and to enter into and perform
its obligations under this Agreement;
(3) the execution and delivery by the Depositor of this Agreement have been
duly authorized by all necessary corporate action on the part of
the Depositor; and neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will
conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Depositor or
its properties or the articles of incorporation or by-laws of the
Depositor, except those conflicts, breaches or defaults which
would not reasonably be expected to have a material adverse
effect on the Depositor's ability to enter into this Agreement
and to consummate the transactions contemplated hereby;
(4) the execution, delivery and performance by the Depositor of this
Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other
action in respect of, any state, federal or other governmental
authority or agency, except those consents, approvals, notices,
registrations or other actions as have already been obtained,
given or made;
(5) this Agreement has been duly executed and delivered by the Depositor
and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation
of the Depositor enforceable against it in accordance with its
terms (subject to applicable bankruptcy and insolvency laws and
other similar laws affecting the enforcement of the rights of
creditors generally);
(6) there are no actions, suits or proceedings pending or, to the knowledge
of the Depositor, threatened against the Depositor, before or by
any court, administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions contemplated by this
Agreement or (ii) with respect to any other matter which in the
judgment of the Depositor will be determined adversely to the
Depositor and will if determined adversely to the Depositor
materially and adversely affect the Depositor's ability to enter
into this Agreement or perform its obligations under this
Agreement; and the Depositor is not in default with respect to
any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and
(7) immediately prior to the transfer and assignment to the Trustee, each
Mortgage Note and each Mortgage were not subject to an assignment
or pledge, and the Depositor had good and marketable title to and
was the sole owner thereof and had full right to transfer and
sell such Mortgage Loan to the Trustee free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security
interest.
72
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01 Master Servicer. (a)The Master Servicer shall supervise,
monitor and oversee the obligation of the Servicers to service and administer
their respective Mortgage Loans in accordance with the terms of the
applicable Servicing Agreement and shall have full power and authority to do
any and all things which it may deem necessary or desirable in connection
with such master servicing and administration. In performing its obligations
hereunder, the Master Servicer shall act in a manner consistent with Accepted
Master Servicing Practices. Furthermore, the Master Servicer shall oversee
and consult with each Servicer as necessary from time-to-time to carry out
the Master Servicer's obligations hereunder, shall receive, review and
evaluate all reports, information and other data provided to the Master
Servicer by each Servicer and shall cause each Servicer to perform and
observe the covenants, obligations and conditions to be performed or observed
by such Servicer under the applicable Servicing Agreement. The Master
Servicer shall independently and separately monitor each Servicer's servicing
activities with respect to each related Mortgage Loan, reconcile the results
of such monitoring with such information provided in the previous sentence on
a monthly basis and coordinate corrective adjustments to the Servicers' and
Master Servicer's records, and based on such reconciled and corrected
information, the Master Servicer shall provide such information to the
Securities Administrator as shall be necessary in order for it to prepare the
statements specified in Section 6.04, and prepare any other information and
statements required to be forwarded by the Master Servicer hereunder. The
Master Servicer shall reconcile the results of its Mortgage Loan monitoring
with the actual remittances of the Servicers to the Protected Account
pursuant to the applicable Servicing Agreements.
(b) The Trustee shall furnish the Servicers and the Master Servicer with
any powers of attorney, in substantially the form attached hereto as Exhibit
K, and other documents in form as provided to it necessary or appropriate to
enable the Servicers and the Master Servicer to service and administer the
related Mortgage Loans and REO Property.
(c) The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO
Property and the servicing thereof to the Certificateholders, the FDIC, and
the supervisory agents and examiners of the FDIC, such access being afforded
only upon reasonable prior written request and during normal business hours
at the office of the Trustee; provided, however, that, unless otherwise
required by law, the Trustee shall not be required to provide access to such
records and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. The Trustee shall allow representatives of
the above entities to photocopy any of the records and documentation and
shall provide equipment for that purpose at a charge that covers the
Trustee's actual costs.
(d) The Trustee shall execute and deliver to the related Servicer and the
Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale
with respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Security Instrument;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or Security Instrument
or otherwise available at law or equity.
Section 3.02 REMIC-Related Covenants. For as long as each 2004-10 REMIC
shall exist, the Trustee and the Securities Administrator shall act in
accordance herewith to assure continuing treatment of such 2004-10 REMIC as a
REMIC, and the Trustee and the Securities Administrator shall comply with any
directions of the Depositor, the related Servicer or the Master Servicer to
assure such continuing treatment. In particular, the Trustee shall not (a)
sell or permit the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee
has received a REMIC Opinion prepared at the expense of the Trust; and (b)
other than with respect to a substitution pursuant to the Mortgage Loan
Purchase Agreement or Section 2.04 or contributions pursuant to Section
4.08(c) and 4.09(c) of this Agreement, as applicable, accept any contribution
to any 2004-10 REMIC after the Startup Day without receipt of a REMIC Opinion.
Section 3.03 Monitoring of Servicers. (a) The Master Servicer shall be
responsible for reporting to the Trustee and the Depositor the compliance by
each Servicer with its duties under the related Servicing Agreement. In the
review of each Servicer's activities, the Master Servicer may rely upon an
officer's certificate of the Servicer with regard to such Servicer's
compliance with the terms of its Servicing Agreement. In the event that the
Master Servicer, in its judgment, determines that a Servicer should be
terminated in accordance with its Servicing Agreement, or that a notice
should be sent pursuant to such Servicing Agreement with respect to the
occurrence of an event that, unless cured, would constitute grounds for such
termination, the Master Servicer shall notify the Depositor and the Trustee
thereof and the Master Servicer shall issue such notice or take such other
action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of
such Servicer thereunder and act as servicer of the related Mortgage Loans or
to cause the Trustee to enter in to a new Servicing Agreement with a
successor Servicer selected by the Master Servicer; provided, however, it is
understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days) before the actual servicing functions
can be fully transferred to such successor Servicer. Such enforcement,
including, without limitation, the legal prosecution of claims, termination
of Servicing Agreements and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the
Master Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Master Servicer shall pay the
costs of such enforcement at its own expense, provided that the Master
Servicer shall not be required to prosecute or defend any legal action except
to the extent that the Master Servicer shall have received reasonable
indemnity for its costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of a Servicer, appointment of a successor Servicer
or the transfer and assumption of servicing by the Master Servicer with
respect to any Servicing Agreement (including, without limitation, (i) all
legal costs and expenses and all due diligence costs and expenses associated
with an evaluation of the potential termination of the Servicer as a result
of an event of default by such Servicer and (ii) all costs and expenses
associated with the complete transfer of servicing, including all servicing
files and all servicing data and the completion, correction or manipulation
of such servicing data as may be required by the successor servicer to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the successor service to service the Mortgage Loans in accordance with
the related Servicing Agreement) are not fully and timely reimbursed by the
terminated Servicer, the Master Servicer shall be entitled to reimbursement
of such costs and expenses from the Master Servicer Collection Account.
The Master Servicer shall require each Servicer to comply with the
remittance requirements and other obligations set forth in the related
Servicing Agreement.
If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of the Servicer, if any, that it
replaces.
Section 3.04 Fidelity Bond. The Master Servicer, at its expense, shall
maintain in effect a blanket fidelity bond and an errors and omissions
insurance policy, affording coverage with respect to all directors, officers,
employees and other Persons acting on such Master Servicer's behalf, and
covering errors and omissions in the performance of the Master Servicer's
obligations hereunder. The errors and omissions insurance policy and the
fidelity bond shall be in such form and amount generally acceptable for
entities serving as master servicers or trustees.
Section 3.05 Power to Act; Procedures. The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject
to the REMIC Provisions and the provisions of Article X hereof, to do any and
all things that it may deem necessary or desirable in connection with the
master servicing and administration of the Mortgage Loans, including but not
limited to the power and authority (i) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and
other instruments and documents, (ii) to consent to transfers of any
Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to collect any Insurance Proceeds and Liquidation Proceeds,
and (iv) to effectuate foreclosure or other conversion of the ownership of
the Mortgaged Property securing any Mortgage Loan, in each case, in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable; provided, however, that the Master Servicer shall
not (and, consistent with its responsibilities under Section 3.03, shall not
permit any Servicer to) knowingly or intentionally take any action, or fail
to take (or fail to cause to be taken) any action reasonably within its
control and the scope of duties more specifically set forth herein, that,
under the REMIC Provisions, if taken or not taken, as the case may be, would
cause any 2004-10 REMIC to fail to qualify as a REMIC or result in the
imposition of a tax upon the Trust (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the
tax on contributions to a REMIC set forth in Section 860G(d) of the Code)
unless the Master Servicer has received an Opinion of Counsel (but not at the
expense of the Master Servicer) to the effect that the contemplated action
will not cause any 2004-10 REMIC to fail to qualify as a REMIC or result in
the imposition of a tax upon any 2004-10 REMIC, as the case may be. The
Trustee shall furnish the Master Servicer, upon written request from a
Servicing Officer, with any powers of attorney empowering the Master Servicer
or any Servicer to execute and deliver instruments of satisfaction or
cancellation, or of partial or full release or discharge, and to foreclose
upon or otherwise liquidate Mortgaged Property, and to appeal, prosecute or
defend in any court action relating to the Mortgage Loans or the Mortgaged
Property, in accordance with the applicable Servicing Agreement and this
Agreement, and the Trustee shall execute and deliver such other documents, as
the Master Servicer may request, to enable the Master Servicer to master
service and administer the Mortgage Loans and carry out its duties hereunder,
in each case in accordance with Accepted Master Servicing Practices (and the
Trustee shall have no liability for misuse of any such powers of attorney by
the Master Servicer or any Servicer). If the Master Servicer or the Trustee
has been advised that it is likely that the laws of the state in which action
is to be taken prohibit such action if taken in the name of the Trustee or
that the Trustee would be adversely affected under the "doing business" or
tax laws of such state if such action is taken in its name, the Master
Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 9.11 hereof. In the performance of its duties hereunder,
the Master Servicer shall be an independent contractor and shall not, except
in those instances where it is taking action in the name of the Trustee, be
deemed to be the agent of the Trustee.
Section 3.06 Due-on-Sale Clauses; Assumption Agreements. To the extent
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale
clause or such clause is otherwise not enforced in accordance with the
applicable Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the applicable Servicing Agreement.
Section 3.07 Release of Mortgage Files. Upon becoming aware of the
payment in full of any Mortgage Loan, or the receipt by any Servicer of a
notification that payment in full has been escrowed in a manner customary for
such purposes for payment to Certificateholders on the next Distribution
Date, the Servicer will, if required (or if the Servicer does not, the Master
Servicer may) under the applicable Servicing Agreement, promptly furnish to
the Custodian, on behalf of the Trustee, two copies of a certification
substantially in the form of Exhibit D hereto signed by a Servicing Officer
or in a mutually agreeable electronic format which will, in lieu of a
signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts
received in connection with such payment that are required to be deposited in
the Protected Account maintained by the applicable Servicer pursuant to
Section 4.01 or by the applicable Servicer pursuant to its Servicing
Agreement have been or will be so deposited) and shall request that the
Custodian, on behalf of the Trustee, deliver to the applicable Servicer the
related Mortgage File. Upon receipt of such certification and request, the
Custodian, on behalf of the Trustee, shall promptly release the related
Mortgage File to the applicable Servicer and the Trustee and Custodian shall
have no further responsibility with regard to such Mortgage File. Upon any
such payment in full, each Servicer is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan,
an instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the
Person or Persons entitled thereto against receipt therefor of such payment,
it being understood and agreed that no expenses incurred in connection with
such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.
From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution
of any such proceedings. The Custodian, on behalf of the Trustee, shall, upon
the request of a Servicer or the Master Servicer, and delivery to the
Custodian, on behalf of the Trustee, of two copies of a request for release
signed by a Servicing Officer substantially in the form of Exhibit D (or in a
mutually agreeable electronic format which will, in lieu of a signature on
its face, originate from a Servicing Officer), release the related Mortgage
File held in its possession or control to the Servicer or the Master
Servicer, as applicable. Such trust receipt shall obligate the Servicer or
the Master Servicer to return the Mortgage File to the Custodian on behalf of
the Trustee, when the need therefor by the Servicer or the Master Servicer no
longer exists unless the Mortgage Loan shall be liquidated, in which case,
upon receipt of a certificate of a Servicing Officer similar to that
hereinabove specified, the Mortgage File shall be released by the Custodian,
on behalf of the Trustee, to the Servicer or the Master Servicer.
Section 3.08 Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.
The Master Servicer shall transmit and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the
terms hereof, or in the case of the Servicers, the applicable Servicing
Agreement, to be delivered to the Trustee or Custodian. Any funds received by
the Master Servicer or by a Servicer in respect of any Mortgage Loan or which
otherwise are collected by the Master Servicer or by a Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan
shall be held for the benefit of the Trustee and the Certificateholders
subject to the Master Servicer's right to retain or withdraw from the Master
Servicer Collection Account the Master Servicing Compensation and other
amounts provided in this Agreement, and to the right of each Servicer to
retain its Servicing Fee and other amounts as provided in the applicable
Servicing Agreement. The Master Servicer shall, and (to the extent provided
in the applicable Servicing Agreement) shall cause each Servicer to, provide
access to information and documentation regarding the Mortgage Loans to the
Trustee, its agents and accountants at any time upon reasonable request and
during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of such Office
and Corporation or examiners of any other federal or state banking or
insurance regulatory authority if so required by applicable regulations of
the Office of Thrift Supervision or other regulatory authority, such access
to be afforded without charge but only upon reasonable request in writing and
during normal business hours at the offices of the Master Servicer designated
by it. In fulfilling such a request the Master Servicer shall not be
responsible for determining the sufficiency of such information.
All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master
Servicer and each Servicer shall be entitled to setoff against, and deduct
from, any such funds any amounts that are properly due and payable to the
Master Servicer or such Servicer under this Agreement or the applicable
Servicing Agreement.
Section 3.09 Standard Hazard Insurance and Flood Insurance Policies.
For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicers under the related Servicing Agreements to
maintain or cause to be maintained standard fire and casualty insurance and,
where applicable, flood insurance, all in accordance with the provisions of
the related Servicing Agreements. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set
forth in the applicable Servicing Agreement and that no earthquake or other
additional insurance is to be required of any Mortgagor or to be maintained
on property acquired in respect of a defaulted loan, other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance.
Pursuant to Section 4.01 and 4.02, any amounts collected by the
Servicers or the Master Servicer, or by any Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of
the property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into
the Master Servicer Collection Account, subject to withdrawal pursuant to
Section 4.02 and 4.03. Any cost incurred by the Master Servicer or any
Servicer in maintaining any such insurance if the Mortgagor defaults in its
obligation to do so shall be added to the amount owing under the Mortgage
Loan where the terms of the Mortgage Loan so permit; provided, however, that
the addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders and shall be
recoverable by the Master Servicer or such Servicer pursuant to Section 4.02
and 4.03.
Section 3.10 Presentment of Claims and Collection of Proceeds. The
Master Servicer shall (to the extent provided in the applicable Servicing
Agreement) cause the related Servicer to, prepare and present on behalf of
the Trustee and the Certificateholders all claims under the Insurance
Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such policies. Any proceeds disbursed to the Master
Servicer (or disbursed to a Servicer and remitted to the Master Servicer) in
respect of such policies, bonds or contracts shall be promptly deposited in
the Master Servicer Collection Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition precedent to the presentation of claims on
the related Mortgage Loan to the insurer under any applicable Insurance
Policy need not be so deposited (or remitted).
Section 3.11 Maintenance of the Primary Mortgage Insurance Policies.
The Master Servicer shall not take, or permit any Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of
such Master Servicer or Servicer, would have been covered thereunder. The
Master Servicer shall use its best reasonable efforts to cause each Servicer
(to the extent required under the related Servicing Agreement) to keep in
force and effect (to the extent that the Mortgage Loan requires the Mortgagor
to maintain such insurance), primary mortgage insurance applicable to each
Mortgage Loan in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable. The Master Servicer shall not,
and shall not permit any Servicer (to the extent required under the related
Servicing Agreement) to, cancel or refuse to renew any such Primary Mortgage
Insurance Policy that is in effect at the date of the initial issuance of the
Mortgage Note and is required to be kept in force hereunder except in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable.
The Master Servicer agrees to present, or to cause each Servicer (to
the extent required under the related Servicing Agreement) to present, on
behalf of the Trustee and the Certificateholders, claims to the insurer under
any Primary Mortgage Insurance Policies and, in this regard, to take such
reasonable action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans. Pursuant to
Section 4.01 and 4.02, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in
the Master Servicer Collection Account, subject to withdrawal pursuant to
Section 4.03.
Section 3.12 Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall
retain possession and custody of the originals (to the extent available) of
any Primary Mortgage Insurance Policies, or certificate of insurance if
applicable, and any certificates of renewal as to the foregoing as may be
issued from time to time as contemplated by this Agreement. Until all amounts
distributable in respect of the Certificates have been distributed in full
and the Master Servicer otherwise has fulfilled its obligations under this
Agreement, the Trustee (or its Custodian, if any, as directed by the Trustee)
shall also retain possession and custody of each Mortgage File in accordance
with and subject to the terms and conditions of this Agreement. The Master
Servicer shall promptly deliver or cause to be delivered to the Trustee (or
the Custodian, as directed by the Trustee), upon the execution or receipt
thereof the originals of any Primary Mortgage Insurance Policies, any
certificates of renewal, and such other documents or instruments that
constitute portions of the Mortgage File that come into the possession of the
Master Servicer from time to time.
Section 3.13 Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall cause each Servicer (to the extent required under the related
Servicing Agreement) to foreclose upon, repossess or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments, all in
accordance with the applicable Servicing Agreement.
Section 3.14 Compensation for the Master Servicer.
The Master Servicer will be entitled to all income and gain realized
from any investment of funds in the Master Servicer Collection Account and
the Distribution Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees,
if any, late payment charges, as collected, if any, or otherwise (but not
including any prepayment premium or penalty) shall be retained by the
applicable Servicer and shall not be deposited in the Protected Account. The
Master Servicer will be entitled to retain, as additional compensation, any
interest remitted by a Servicer in connection with a Principal Prepayment in
full or otherwise in excess of amounts required to be remitted to the
Distribution Account (such amounts together with the amounts specified in the
first sentence of this Section 3.14, the "Master Servicing Compensation").
The Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
Section 3.15 REO Property.
In the event the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of sale shall
be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell, any
REO Property as expeditiously as possible and in accordance with the
provisions of this Agreement and the related Servicing Agreement, as
applicable. Pursuant to its efforts to sell such REO Property, the Master
Servicer shall cause the applicable Servicer to protect and conserve, such
REO Property in the manner and to the extent required by the applicable
Servicing Agreement, in accordance with the REMIC Provisions and in a manner
that does not result in a tax on "net income from foreclosure property"
(unless such result would maximize the Trust Fund's after-tax return on such
property) or cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code.
The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property
in the Protected Account.
The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Monthly Advances and other unreimbursed advances as well
as any unpaid Servicing Fees from Liquidation Proceeds received in connection
with the final disposition of such REO Property; provided, that any such
unreimbursed Monthly Advances as well as any unpaid Servicing Fees may be
reimbursed or paid, as the case may be, prior to final disposition, out of
any net rental income or other net amounts derived from such REO Property.
To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of
any payment to the Master Servicer and the applicable Servicer as provided
above shall be deposited in the Protected Account on or prior to the
Determination Date in the month following receipt thereof and be remitted by
wire transfer in immediately available funds to the Master Servicer for
deposit into the related Master Servicer Collection Account on the next
succeeding Servicer Remittance Date.
Section 3.16 Annual Officer's Certificate as to Compliance.
The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 1 of each year, commencing on March 1, 2005, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or
portion thereof and its performance under this Agreement, (ii) to the best of
such Servicing Officer's knowledge, based on such review, such Master
Servicer has performed and fulfilled its duties, responsibilities and
obligations under this Agreement in all material respects throughout such
year, or, if there has been a default in the fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof, (iii) nothing has come
to the attention of such Servicing Officer to lead such Servicing Officer to
believe that any Servicer has failed to perform any of its duties,
responsibilities and obligations under its Servicing Agreement in all
material respects throughout such year, or, if there has been a material
default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such
Servicing Officer and the nature and status thereof.
Copies of such statements shall be provided to any Certificateholder
upon request, by the Master Servicer or by the Trustee at the Master
Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
Section 3.17 Annual Independent Accountant's Servicing Report. If the
Master Servicer has, during the course of any fiscal year, directly serviced
any of the Mortgage Loans, then the Master Servicer at its expense shall
cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and
the Depositor on or before March 1 of each year, commencing on March 1, 2005
to the effect that, with respect to the most recently ended fiscal year, such
firm has examined certain records and documents relating to the Master
Servicer's performance of its servicing obligations under this Agreement and
pooling and servicing and trust agreements in material respects similar to
this Agreement and to each other and that, on the basis of such examination
conducted substantially in compliance with the audit program for mortgages
serviced for Xxxxxxx Mac or the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Master Servicer's
activities have been conducted in compliance with this Agreement, or that
such examination has disclosed no material items of noncompliance except for
(i) such exceptions as such firm believes to be immaterial, (ii) such other
exceptions as are set forth in such statement and (iii) such exceptions that
the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages Serviced by Xxxxxxx Mac requires it to report. Copies
of such statements shall be provided to any Certificateholder upon request by
the Master Servicer, or by the Trustee at the expense of the Master Servicer
if the Master Servicer shall fail to provide such copies. If such report
discloses exceptions that are material, the Master Servicer shall advise the
Trustee whether such exceptions have been or are susceptible of cure, and
will take prompt action to do so.
Section 3.18 Reports Filed with Securities and Exchange Commission.
Within 15 days after each Distribution Date, the Securities Administrator
shall, in accordance with industry standards, file with the Commission via
the Electronic Data Gathering and Retrieval System ("XXXXX"), a Form 8-K (or
other comparable form containing the same or comparable information or other
information mutually agreed upon) with a copy of the statement to the Trustee
who shall make available a copy of the monthly statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30 in each year, the Securities Administrator shall, in accordance
with industry standards and only if instructed by the Depositor, file a Form
15 Suspension Notice with respect to the Trust Fund, if applicable. Prior to
(i) March 15, 2005 and (ii) unless and until a Form 15 Suspension Notice
shall have been filed, prior to March 15 of each year thereafter, the Master
Servicer shall provide the Securities Administrator with a Master Servicer
Certification, together with a copy of the annual independent accountant's
servicing report and annual statement of compliance of each Servicer, in each
case, required to be delivered pursuant to the related Servicing Agreement,
and, if applicable, the annual independent accountant's servicing report and
annual statement of compliance to be delivered by the Master Servicer
pursuant to Sections 3.16 and 3.17. Prior to (i) March 31, 2005, or such
earlier filing date as may be required by the Commission, and (ii) unless and
until a Form 15 Suspension Notice shall have been filed, March 31 of each
year thereafter, or such earlier filing date as may be required by the
Commission, the Securities Administrator shall prepare and file a Form 10-K,
in substance conforming to industry standards, with respect to the Trust.
Such Form 10-K shall include the Master Servicer Certification and other
documentation provided by the Master Servicer pursuant to the second
preceding sentence. The Depositor hereby grants to the Securities
Administrator a limited power of attorney to execute and file each such
document on behalf of the Depositor. Such power of attorney shall continue
until either the earlier of (i) receipt by the Securities Administrator from
the Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. The Depositor agrees to promptly furnish to
the Securities Administrator, from time to time upon request, such further
information, reports and financial statements within its control related to
this Agreement and the Mortgage Loans as the Securities Administrator
reasonably deems appropriate to prepare and file all necessary reports with
the Commission. The Securities Administrator shall have no responsibility to
file any items other than those specified in this Section 3.18; provided,
however, the Securities Administrator will cooperate with the Depositor in
connection with any additional filings with respect to the Trust Fund as the
Depositor deems necessary under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Fees and expenses incurred by the Securities
Administrator in connection with this Section 3.18 shall not be reimbursable
from the Trust Fund.
Section 3.19 EMC. On the Closing Date, EMC will receive from the
Depositor a payment of $5,000.
Section 3.20 UCC. The Depositor shall inform the Trustee in writing of
any Uniform Commercial Code financing statements that were filed on the
Closing Date in connection with the Trust with stamped recorded copies of
such financing statements to be delivered to the Trustee promptly upon
receipt by the Depositor. The Trustee agrees to monitor and notify the
Depositor if any continuation statements for such Uniform Commercial Code
financing statements need to be filed. If directed by the Depositor in
writing, the Trustee will file any such continuation statements solely at the
expense of the Depositor. The Depositor shall file any financing statements
or amendments thereto required by any change in the Uniform Commercial Code..
Section 3.21 Optional Purchase of Defaulted Mortgage Loans.
With respect to any Mortgage Loan which as of the first day of a
Calendar Quarter is delinquent in payment by 90 days or more or is an REO
Property, EMC shall have the right to purchase such Mortgage Loan from the
Trust at a price equal to the Repurchase Price; provided however (i) that
such Mortgage Loan is still 90 days or more delinquent or is an REO Property
as of the date of such purchase and (ii) this purchase option, if not
theretofore exercised, shall terminate on the date prior to the last day of
the related Calendar Quarter. This purchase option, if not exercised, shall
not be thereafter reinstated unless the delinquency is cured and the Mortgage
Loan thereafter again becomes 90 days or more delinquent or becomes an REO
Property, in which case the option shall again become exercisable as of the
first day of the related Calendar Quarter.
If at any time EMC remits to the Master Servicer a payment for deposit
in the Master Servicer Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan, and EMC provides to the Trustee a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Master Servicer Collection Account, then
the Trustee shall execute the assignment of such Mortgage Loan to EMC at the
request of EMC without recourse, representation or warranty and EMC shall
succeed to all of the Trustee's right, title and interest in and to such
Mortgage Loan, and all security and documents relative thereto. Such
assignment shall be an assignment outright and not for security. EMC will
thereupon own such Mortgage, and all such security and documents, free of any
further obligation to the Trustee or the Certificateholders with respect
thereto.
ARTICLE IV
Accounts
Section 4.01 Protected Accounts. (a)The Master Servicer shall enforce
the obligation of each Servicer to establish and maintain a Protected Account
in accordance with the applicable Servicing Agreement, with records to be
kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into
which accounts shall be deposited within 48 hours (or as of such other time
specified in the related Servicing Agreement) of receipt all collections of
principal and interest on any Mortgage Loan and with respect to any REO
Property received by a Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, and advances made from the Servicer's own
funds (less servicing compensation as permitted by the applicable Servicing
Agreement in the case of any Servicer) and all other amounts to be deposited
in the Protected Account. The Servicer is hereby authorized to make
withdrawals from and deposits to the related Protected Account for purposes
required or permitted by this Agreement. To the extent provided in the
related Servicing Agreement, the Protected Account shall be held in a
Designated Depository Institution and segregated on the books of such
institution in the name of the Trustee for the benefit of Certificateholders.
(b) To the extent provided in the related Servicing Agreement, amounts on
deposit in a Protected Account may be invested in Permitted Investments in
the name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds,
such Permitted Investments to mature, or to be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Master Servicer Collection Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the related
Servicer under the applicable Servicing Agreement, and the risk of loss of
moneys required to be distributed to the Certificateholders resulting from
such investments shall be borne by and be the risk of the related Servicer.
The related Servicer (to the extent provided in the Servicing Agreement)
shall deposit the amount of any such loss in the Protected Account within two
Business Days of receipt of notification of such loss but not later than the
second Business Day prior to the Distribution Date on which the moneys so
invested are required to be distributed to the Certificateholders.
(c) To the extent provided in the related Servicing Agreement and subject
to this Article IV, on or before each Servicer Remittance Date, the related
Servicer shall withdraw or shall cause to be withdrawn from the Protected
Accounts and shall immediately deposit or cause to be deposited in the Master
Servicer Collection Account amounts representing the following collections
and payments (other than with respect to principal of or interest on the
Mortgage Loans due on or before the Cut-off Date) with respect to each Loan
Group:
(i) Scheduled Payments on the Mortgage Loans received or any related
portion thereof advanced by the Servicers pursuant to the Servicing
Agreements which were due during or before the related Due Period, net
of the amount thereof comprising the Servicing Fees;
(ii) Full Principal Prepayments and any Liquidation Proceeds received by the
Servicers with respect to such Mortgage Loans in the related Prepayment
Period (or, in the case of Subsequent Recoveries, during the related
Due Period), with interest to the date of prepayment or liquidation,
net of the amount thereof comprising the Servicing Fees;
(iii) Partial Principal Prepayments received by the Servicers for such
Mortgage Loans in the related Prepayment Period; and
(iv) Any amount to be used as an Monthly Advance.
(d) Withdrawals may be made from an Account only to (i) make remittances as
provided in Section 4.01(c), 4.02 and 4.03, (ii) reimburse the Master
Servicer or a Servicer for Monthly Advances which have been recovered by
subsequent collection from the related Mortgagor; (iii) remove amounts
deposited in error; to remove fees, charges or other such amounts deposited
on a temporary basis; or (iv) clear and terminate such account at the
termination of this Agreement in accordance with Section 10.01. As provided
in Sections 4.01(c) and 4.02(b) certain amounts otherwise due to the
Servicers may be retained by them and need not be deposited in the Master
Servicer Collection Account.
Section 4.02 Master Servicer Collection Account. (a)The Master Servicer
shall establish and maintain in the name of the Trustee, for the benefit of
the Certificateholders, the Master Servicer Collection Account as a
segregated trust account or accounts. The Master Servicer Collection Account
shall be an Eligible Account. The Master Servicer will deposit in the Master
Servicer Collection Account as identified by the Master Servicer and as
received by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Monthly Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Net Liquidation Proceeds received by or on
behalf of the Master Servicer or which were not deposited in a
Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans purchased by
the Seller pursuant to Section 2.02 or 2.03, any amounts which are to
be treated pursuant to Section 2.04 of this Agreement as the payment of
such a Repurchase Price, the Repurchase Price with respect to any
Mortgage Loans purchased by EMC pursuant to Section 3.21, and all
proceeds of any Mortgage Loans or property acquired with respect
thereto repurchased by EMC or its designee pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master Servicer and
required to be deposited in the Master Servicer Collection Account
pursuant to this Agreement.
(b) All amounts deposited to the Master Servicer Collection Account shall
be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions
of this Agreement. The requirements for crediting the Master Servicer
Collection Account or the Distribution Account shall be exclusive, it being
understood and agreed that, without limiting the generality of the foregoing,
payments in the nature of (i) prepayment or late payment charges or
assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges and (ii) the items
enumerated in Sections 4.05(a)(i) through (iv) and (vi) through (xii) with
respect to the Securities Administrator and the Master Servicer, need not be
credited by the Master Servicer or the related Servicer to the Distribution
Account or the Master Servicer Collection Account, as applicable. In the
event that the Master Servicer shall deposit or cause to be deposited to the
Distribution Account any amount not required to be credited thereto, the
Trustee, upon receipt of a written request therefor signed by a Servicing
Officer of the Master Servicer, shall promptly transfer such amount to the
Master Servicer, any provision herein to the contrary notwithstanding.
The amount at any time credited to the Master Servicer Collection
Account shall be invested, in the name of the Trustee, or its nominee, for
the benefit of the Certificateholders, in Permitted Investments as directed
by Master Servicer. All Permitted Investments shall mature or be subject to
redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Account Deposit Date. Any and all investment earnings
on amounts on deposit in the Master Servicer Collection Account from time to
time shall be for the account of the Master Servicer. The Master Servicer
from time to time shall be permitted to withdraw or receive distribution of
any and all investment earnings from the Master Servicer Collection Account.
The risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be
the risk of the Master Servicer. The Master Servicer shall deposit the amount
of any such loss in the Master Servicer Collection Account within two
Business Days of receipt of notification of such loss but not later than the
second Business Day prior to the Distribution Date on which the moneys so
invested are required to be distributed to the Certificateholders.
Section 4.03 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account. (a)The Master Servicer will, from time to time
on demand of a Servicer or the Securities Administrator, make or cause to be
made such withdrawals or transfers from the Master Servicer Collection
Account as the Master Servicer has designated for such transfer or withdrawal
pursuant to this Agreement and the related Servicing Agreement. The Master
Servicer may clear and terminate the Master Servicer Collection Account
pursuant to Section 10.01 and remove amounts from time to time deposited in
error.
On an ongoing basis, the Master Servicer shall withdraw from the Master
Servicer Collection Account (i) any expenses recoverable by the Trustee, the
Master Servicer, the Securities Administrator or the Custodian pursuant to
Sections 3.03, 7.04 and 9.05 and (ii) any amounts payable to the Master
Servicer as set forth in Section 3.14.
In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Monthly Advances required to be made by the
Master Servicer with respect to the Mortgage Loans.
No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all Available Funds on
deposit in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.
Section 4.04 Distribution Account. (a)The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the
Certificateholders, the Distribution Account as a segregated trust account or
accounts.
(b) All amounts deposited to the Distribution Account shall be held by the
Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute a trust account of the Trust
Fund segregated on the books of the Trustee and held by the Trustee in trust
in its Corporate Trust Office, and the Distribution Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee
or the Master Servicer (whether made directly, or indirectly through a
liquidator or receiver of the Trustee or the Master Servicer). The
Distribution Account shall be an Eligible Account. The amount at any time
credited to the Distribution Account shall be (i) held in cash or fully
insured by the FDIC to the maximum coverage provided thereby or (ii) invested
in the name of the Trustee, in such Permitted Investments selected by the
Master Servicer or deposited in demand deposits with such depository
institutions as selected by the Master Servicer, provided that time deposits
of such depository institutions would be a Permitted Investment. All
Permitted Investments shall mature or be subject to redemption or withdrawal
on or before, and shall be held until, the next succeeding Distribution Date
if the obligor for such Permitted Investment is the Trustee or, if such
obligor is any other Person, the Business Day preceding such Distribution
Date. All investment earnings on amounts on deposit in the Distribution
Account or benefit from funds uninvested therein from time to time shall be
for the account of the Master Servicer. The Master Servicer shall be
permitted to withdraw or receive distribution of any and all investment
earnings from the Distribution Account on each Distribution Date. If there is
any loss on a Permitted Investment or demand deposit, the Master Servicer
shall remit the amount of the loss to the Trustee who shall deposit such
amount in the Distribution Account. With respect to the Distribution Account
and the funds deposited therein, the Master Servicer shall take such action
as may be necessary to ensure that the Certificateholders shall be entitled
to the priorities afforded to such a trust account (in addition to a claim
against the estate of the Trustee) as provided by 12 U.S.C. 92a(e), and
applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 4.05 Permitted Withdrawals and Transfers from the Distribution
Account. (a)The Trustee will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to this Agreement and
the Servicing Agreements or as the Securities Administrator has instructed
hereunder for the following purposes (limited in the case of amounts due the
Master Servicer to those not withdrawn from the Master Servicer Collection
Account in accordance with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Servicer for any Monthly
Advance of its own funds, the right of the Master Servicer or a
Servicer to reimbursement pursuant to this subclause (i) being limited
to amounts received on a particular Mortgage Loan (including, for this
purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late payments or recoveries of
the principal of or interest on such Mortgage Loan with respect to
which such Monthly Advance was made;
(ii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan
for amounts expended by the Master Servicer or such Servicer in good
faith in connection with the restoration of the related Mortgaged
Property which was damaged by an Uninsured Cause or in connection with
the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from Insurance
Proceeds relating to a particular Mortgage Loan for insured expenses
incurred with respect to such Mortgage Loan and to reimburse the Master
Servicer or such Servicer from Liquidation Proceeds from a particular
Mortgage Loan for Liquidation Expenses incurred with respect to such
Mortgage Loan; provided that the Master Servicer shall not be entitled
to reimbursement for Liquidation Expenses with respect to a Mortgage
Loan to the extent that (i) any amounts with respect to such Mortgage
Loan were paid as Excess Liquidation Proceeds pursuant to clause (xi)
of this Section 4.03(a) to the Master Servicer and (ii) such
Liquidation Expenses were not included in the computation of such
Excess Liquidation Proceeds;
(iv) to pay the Master Servicer or any Servicer, as appropriate, from
Liquidation Proceeds or Insurance Proceeds received in connection with
the liquidation of any Mortgage Loan, the amount which it or such
Servicer would have been entitled to receive under clause (ix) of this
Section 4.03(a) as servicing compensation on account of each defaulted
scheduled payment on such Mortgage Loan if paid in a timely manner by
the related Mortgagor;
(v) to pay the Master Servicer or any Servicer from the Repurchase Price
for any Mortgage Loan, the amount which it or such Servicer would have
been entitled to receive under clause (ix) of this Section 4.03(a) as
servicing compensation;
(vi) to reimburse the Master Servicer or any Servicer for advances of funds
(other than Monthly Advances) made with respect to the Mortgage Loans,
and the right to reimbursement pursuant to this clause being limited to
amounts received on the related Mortgage Loan (including, for this
purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late recoveries of the payments
for which such advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any Monthly
Advance or advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Monthly Advance or advance
has not been reimbursed pursuant to clauses (i) and (vi) of this
Section 4.03(a);
(viii) to pay the Master Servicer as set forth in Section 3.14;
(ix) to reimburse the Master Servicer for expenses, costs and liabilities
incurred by and reimbursable to it pursuant to Sections 3.03, 7.04(c)
and (d);
(x) to pay to the Master Servicer, as additional servicing compensation,
any Excess Liquidation Proceeds to the extent not retained by the
related Servicer;
(xi) to reimburse or pay any Servicer any such amounts as are due thereto
under the applicable Servicing Agreement and have not been retained by
or paid to the Servicer, to the extent provided in the related
Servicing Agreement;
(xii) to reimburse the Trustee, the Securities Administrator or the Custodian
for expenses, costs and liabilities incurred by or reimbursable to it
pursuant to this Agreement;
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to Section
10.01.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to clauses (i) through
(vi) and (viii) or with respect to any such amounts which would have been
covered by such clauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section
4.02(b). Reimbursements made pursuant to clauses (ix), (xi) and (xii) will
be allocated between the Loan Groups pro rata based on the aggregate Stated
Principal Balances of the Mortgage Loans in each Loan Group.
(c) On each Distribution Date, the Trustee shall distribute the Interest
Funds and Principal Funds to the extent on deposit in the Distribution
Account to the Holders of the Certificates in accordance with distribution
instructions provided to it by the Securities Administrator no later than two
Business Days prior to such Distribution Date and determined by the
Securities Administrator in accordance with Section 6.01.
Section 4.06 Reserve Fund. (a)On or before the Closing Date, the Trustee
shall establish a Reserve Fund on behalf of the Holders of the Offered
Certificates. The Reserve Fund must be an Eligible Account. The Reserve Fund
shall be entitled "Reserve Fund, JPMorgan Chase Bank as Trustee for the
benefit of holders of Structured Asset Mortgage Investments II Inc., Bear
Xxxxxxx ALT-A Trust 2004-10, Mortgage Pass-Through Certificates, Series
2004-10, Class I-A, Class II-A, Class M-1, Class M-2, Class B-1 and Class
B-2". The Trustee shall demand payment of all money payable by Bear Xxxxxxx
Financial Products Inc. (the "Counterparty") under the Cap Contracts. The
Trustee shall deposit in the Reserve Fund all payments received by it from
the Counterparty pursuant to the Cap Contracts and, prior to distribution of
such amounts pursuant to Section 6.01(a), all payments described under the
sixth and seventh clause of Section 6.01(a). On each Distribution Date, the
Trustee shall remit amounts received by it from the Counterparty to the
Holders of the applicable Offered Certificates in the manner provided in
Section 6.01(b).
(b) The Reserve Fund is an "outside reserve fund" within the meaning of
Treasury Regulation '1.860G-2(h) and shall be an asset of the Trust Fund but
not an asset of any 2004-10 REMIC. The Trustee on behalf of the Trust shall
be the nominal owner of the Reserve Fund. The Class B-IO Certificateholder
shall be the beneficial owner of the Reserve Fund, subject to the power of
the Trustee to distribute amounts under Section 6.01(b) and the sixth and
seventh clause of Section 6.01(a). For federal income tax purposes, amounts
distributed to Certificateholders pursuant to the sixth and seventh clause of
Section 6.01(a) will be treated as first distributed to the Class B-IO
Certificates and then paid from the Class B-IO Certificateholders to the
applicable holders of the Offered Certificates. Amounts in the Reserve Fund
shall, at the direction of the Class B-IO Certificateholder, be held either
uninvested in a trust or deposit account of the Trustee with no liability for
interest or other compensation thereon or invested in Permitted Investments
that mature no later than the Business Day prior to the next succeeding
Distribution Date. The Trustee shall distribute all net income and gain from
such investments in the Reserve Fund to the Class B-IO Certificateholder, not
as a distribution in respect of any interest in any 2004-10 REMIC, on each
Distribution Date. All amounts earned on amounts on deposit in the Reserve
Fund shall be taxable to the Class B-IO Certificateholder. Any losses on such
investments shall be deposited in the Reserve Fund by the Class B-IO
Certificateholder out of its own funds immediately as realized.
Section 4.07 Class XP Reserve Account. (a)The Master Servicer shall
establish and maintain with itself a separate, segregated trust account,
which shall be an Eligible Account, titled "Reserve Account, Xxxxx Fargo
Bank, National Association, as Master Servicer f/b/o Bear Xxxxxxx ALT-A Trust
2004-10, Mortgage Pass-Through Certificates, Series 2004-10, Class XP". On
the Closing Date, the Depositor shall deposit $100 into the Class XP Reserve
Account. Funds on deposit in the Class XP Reserve Account shall be held in
trust by the Master Servicer for the holder of the Class XP Certificate.
(b) The amount on deposit in the Class XP Reserve Account shall be held
uninvested. On the earlier of (x) the Business Day prior to the Distribution
Date on which all the assets of the Trust Fund are repurchased as described
in Section 10.01(a) and (y) the Business Day prior to the Distribution Date
immediately following the Prepayment Period during which the last Prepayment
Charge on the Mortgage Loans is payable by the related Mortgagor, which
Prepayment Period is the month of July 2010, the Master Servicer shall
withdraw the amount on deposit in the Class XP Reserve Account and remit such
amount to the Trustee and provide instruction to the Trustee to pay such
amount to the Class XP Certificate in reduction of the Certificate Principal
Balance thereof.
85
ARTICLE V
Certificates
Section 5.01 Certificates. (a)The Depository, the Depositor and the
Trustee have entered into a Depository Agreement dated as of the Closing Date
(the "Depository Agreement"). Except for the Residual Certificates, the
Private Certificates and the Individual Certificates and as provided in
Section 5.01(b), the Certificates shall at all times remain registered in the
name of the Depository or its nominee and at all times: (i) registration of
such Certificates may not be transferred by the Trustee except to a successor
to the Depository; (ii) ownership and transfers of registration of such
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iii) the Depository may collect its
usual and customary fees, charges and expenses from its Depository
Participants; (iv) the Trustee shall deal with the Depository as
representative of such Certificate Owners of the respective Class of
Certificates for purposes of exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (v) the Trustee may rely and
shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates
of one or more such Classes request that the Trustee cause such Class to
become Global Certificates, the Trustee and the Depositor will take such
action as may be reasonably required to cause the Depository to accept such
Class or Classes for trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
it represents or of brokerage firms for which it acts as agent in accordance
with the Depository's normal procedures.
(b) If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Depositor is unable to locate a
qualified successor within 30 days or (ii) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository, the Trustee shall request that the Depository
notify all Certificate Owners of the occurrence of any such event and of the
availability of definitive, fully registered Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Certificates
by the Depository, accompanied by registration instructions from the
Depository for registration, the Trustee shall issue the definitive
Certificates.
In addition, if an Event of Default has occurred and is continuing,
each Certificate Owner materially adversely affected thereby may at its
option request a definitive Certificate evidencing such Certificate Owner's
interest in the related Class of Certificates. In order to make such
request, such Certificate Owner shall, subject to the rules and procedures
of the Depository, provide the Depository or the related Depository
Participant with directions for the Trustee to exchange or cause the
exchange of the Certificate Owner's interest in such Class of Certificates
for an equivalent interest in fully registered definitive form. Upon
receipt by the Trustee of instructions from the Depository directing the
Trustee to effect such exchange (such instructions to contain information
regarding the Class of Certificates and the Current Principal Balance being
exchanged, the Depository Participant account to be debited with the
decrease, the registered holder of and delivery instructions for the
definitive Certificate, and any other information reasonably required by the
Trustee), (i) the Trustee shall instruct the Depository to reduce the
related Depository Participant's account by the aggregate Current Principal
Balance of the definitive Certificate, (ii) the Trustee shall execute and
deliver, in accordance with the registration and delivery instructions
provided by the Depository, a Definitive Certificate evidencing such
Certificate Owner's interest in such Class of Certificates and (iii) the
Trustee shall execute a new Book-Entry Certificate reflecting the reduction
in the aggregate Current Principal Balance of such Class of Certificates by
the amount of the definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in
the delivery of any instructions required pursuant to this Section 5.01(b)
and may conclusively rely on, and shall be protected in relying on, such
instructions.
(c) REMIC II will be evidenced by (x) the REMIC II Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC II and (y) the Class
R-II Certificates, which are hereby designated as the single class of
"residual interests" in REMIC II. On each Distribution Date, the Trustee
shall cause the REMIC II Distribution Amount to be distributed by REMIC II to
REMIC III on account of the REMIC II Regular Interests or withdrawn from the
Distribution Account and distributed to the holders of the Class R-II
Certificates, as the case may be, in the amounts and with the priorities set
forth in the definition of REMIC II Distribution Amount.
The REMIC II Regular Interests and the Class R-II Certificates will
have the following designations and pass-through rates:
Initial
Uncertificated REMIC Uncertificated Latest Possible
Designation II Pass Through Rate Principal Balance Maturity Date(3)
LT1 Variable(1) $507,021,178.30 October 25, 2034
LT2 Variable(1) $9,153.67 October 25, 2034
LT3 0.00% $41,583.05 October 25, 2034
LT4 Variable(1) $41,583.05 October 25, 2034
LT5 Variable(1) $575,245,846.80 October 25, 2034
LT6 Variable(1) $10,290.76 October 25, 2034
LT7 0.00% $47,273.10 October 25, 2034
LT8 Variable(1) $47,273.10 October 25, 2034
LT-Y1(2) Variable(1) $253,677.94 October 25, 2034
LT-Y2(2) Variable(1) $287,819.25 October 25, 2034
R-II 0.00% $0.00 October 25, 2034
(1) Calculated as provided in the definition of Uncertificated REMIC II
Pass-Through Rate.
(2) LT-Y1 will have the same interest rate, principal balance, Principal
Reduction Amount and allocation of Realized Losses as the REMIC I
Regular Interest Y-1. LT-Y2 will have the same interest rate,
principal balance, Principal Reduction Amount and allocation of
Realized Losses as the REMIC I Regular Interest Y-2. LT-Y1 and
LT-Y2 shall be entitled to receive any prepayment penalties received
by the Master Servicer with respect to the Mortgage Loans in the
related Loan Group and ultimately payable to the Class XP
Certificates.
(3) Solely for purposes of Section 1.860G 1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the
maturity date for the Mortgage Loan with the latest maturity date
has been designated as the "latest possible maturity date" for each
REMIC II Regular Interest.
REMIC I will be evidenced by (x) the REMIC I Regular Interests
(designated below), which will be uncertificated and non-transferable and are
hereby designated as the "regular interests" in REMIC I and (y) the Class R-I
Certificates, which is hereby designated as the single class of "residual
interests" in REMIC I. On each Distribution Date, the Trustee shall cause the
REMIC I Distribution Amount to be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R-I Certificates, as the
case may be , in the amounts and with the priorities set forth in the
definition of REMIC I Distribution Amount.
The REMIC I Regular Interests and the Class R-I Certificates will have
the following designations and pass-through rates:
Initial
Uncertificated REMIC Uncertificated Assumed Final
Designation I Pass Through Rate Principal Balance Maturity Date(1)
Y-1 Variable(2) $253,677.94 October 25, 2034
Y-2 Variable(2) $287,819.25 October 25, 2034
Z-1 Variable(2) $507,113,498.06 October 25, 2034
Z-2 Variable(2) $576,350,683.75 October 25, 2034
R-I 0% $0.00 October 25, 2034
(1) Solely for purposes of Section 1.860G 1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each REMIC I Regular
Interest.
(2) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass Through Rate" herein. Y-1 shall also be entitled to receive any
prepayment penalties received by the Master Servicer with respect to the
Mortgage Loans in Loan Group I and ultimately payable to the Class XP
Certificates. Y-2 shall be entitled to receive any prepayment penalties
received by the Master Servicer with respect to the Mortgage Loans in Loan
Group II and ultimately payable to the Class XP Certificates.
REMIC III will be evidenced by (x) the Certificates (other than the
Class R Certificates) (the "REMIC III Regular Interests") exclusive of the
rights, if any, of such Certificates to payments of Basis Risk Carryforward
Amounts or payments from the Cap Contract, which are hereby designated as the
"regular interests" in REMIC III and have the principal balances and accrue
interest at the Pass-Through Rates equal to those set forth in this Section
5.01(c) and (y) the Class R-III Certificates, which are hereby designated as
the single class of "residual interests" in REMIC III.
The Classes of the Certificates shall have the following designations,
initial principal amounts and Pass-Through Rates:
Designation Initial Principal Amount Pass Through Rate
I-A-1 $175,000,000 (1)
I-A-2 $204,100,000 (2)
I-A-3 $95,542,000 (3)
II-A-1 $484,658,000 (4)
II-A-2 $53,851,000 (5)
M-1 $25,992,000 (6)
M-2 $20,578,000 (7)
B-1 $10,830,000 (8)
B-2 $8,664,000 (9)
XP $100 (10)
B-IO $3,790,679 (11)
R-I $0 (12)
R-II $0 (12)
R-III $0 (12)
(1) The Class I-A-1 Certificates will bear interest at a rate equal
to the least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and
(iii) the related Net Rate Cap. The Pass-Through Rate with respect to the
first Interest Accrual Period is 1.98% per annum.
(2) The Class I-A-2 Certificates will bear interest at a rate equal
to the least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and
(iii) the related Net Rate Cap. The Pass-Through Rate with respect to the
first Interest Accrual Period is 1.86% per annum.
(3) The Class I-A-3 Certificates will bear interest at a rate equal
to the least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and
(iii) the related Net Rate Cap. The Pass-Through Rate with respect to the
first Interest Accrual Period is 2.14% per annum.
(4) The Class II-A-1 Certificates will bear interest at a rate equal
to the least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and
(iii) the related Net Rate Cap. The Pass-Through Rate with respect to the
first Interest Accrual Period is 1.97% per annum.
(5) The Class II-A-2 Certificates will bear interest at a rate equal
to the least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and
(iii) the related Net Rate Cap. The Pass-Through Rate with respect to the
first Interest Accrual Period is 2.09% per annum.
(6) The Class M-1 Certificates will bear interest at a rate equal to
the least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and
(iii) the related Net Rate Cap. The Pass-Through Rate with respect to the
first Interest Accrual Period is 2.24% per annum.
(7) The Class M-2 Certificates will bear interest at a rate equal to
the least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and
(iii) the related Net Rate Cap. The Pass-Through Rate with respect to the
first Interest Accrual Period is 2.74% per annum.
(8) The Class B-1 Certificates will bear interest at a rate equal to
the least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and
(iii) the related Net Rate Cap. The Pass-Through Rate with respect to the
first Interest Accrual Period is 3.44% per annum.
(9) The Class B-2 Certificates will bear interest at a rate equal to
the least of (i) One-Month LIBOR plus the related Margin, (ii) 11.50% and
(iii) the related Net Rate Cap. The Pass-Through Rate with respect to the
first Interest Accrual Period is 3.44% per annum.
(10) The Class XP Certificates will not bear any interest. It will be
entitled to receive prepayment penalties collected with respect to the
Mortgage Loans.
(11) The Class B-IO Certificates will bear interest at a per annum
rate equal to the Class B-IO Pass-Through Rate on its Notional Amount. The
Class B-IO Certificates will be comprised of two REMIC III regular interests,
a principal only regular interest designated B-IO-P and an interest only
regular interest designated B-IO-I, which will be entitled to distributions
as set forth herein.
(12) The Class R-I, Class R-II and Class R-III Certificates will not
bear any interest.
(d) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date in the Trust Fund has
been designated as the "latest possible maturity date" for the REMIC III
Regular Interests and the Certificates.
(e) With respect to each Distribution Date, each Class of Certificates
shall accrue interest during the related Interest Accrual Period. With
respect to each Distribution Date and (i) each such Class of Certificates
(other than the Class B-IO Certificates), interest shall be calculated, on
the basis of a 360-day year and the actual number of days elapsed in the
related Interest Accrual Period, based upon the respective Pass-Through Rate
set forth, or determined as provided, above and the Certificate Principal
Balance of such Class applicable to such Distribution Date. With respect to
each Distribution Date and the Class B-IO Certificates, interest shall be
calculated, on the basis of a 360-day year consisting of twelve 30-day
months, based upon the respective Pass-Through Rate set forth, or determined
as provided, above and the Notional Amount of such Class applicable to such
Distribution Date.
(f) The Certificates shall be substantially in the forms set forth in
Exhibits X-0, X-0, X-0, X-0, X-0, X-0 and A-7. On original issuance, the
Trustee shall sign, countersign and shall deliver them at the direction of
the Depositor. Pending the preparation of definitive Certificates of any
Class, the Trustee may sign and countersign temporary Certificates that are
printed, lithographed or typewritten, in authorized denominations for
Certificates of such Class, substantially of the tenor of the definitive
Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers or
authorized signatories executing such Certificates may determine, as
evidenced by their execution of such Certificates. If temporary Certificates
are issued, the Depositor will cause definitive Certificates to be prepared
without unreasonable delay. After the preparation of definitive Certificates,
the temporary Certificates shall be exchangeable for definitive Certificates
upon surrender of the temporary Certificates at the office of the Trustee,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Certificates, the Trustee shall sign and countersign and
deliver in exchange therefor a like aggregate principal amount, in authorized
denominations for such Class, of definitive Certificates of the same Class.
Until so exchanged, such temporary Certificates shall in all respects be
entitled to the same benefits as definitive Certificates.
(g) Each Class of Book-Entry Certificates will be registered as a single
Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in
the case of the Senior Certificates (other than the Residual Certificates),
$25,000 and in each case increments of $1,000 in excess thereof, and (ii) in
the case of the Subordinate Certificates, $25,000 and increments of $1,000 in
excess thereof, except that one Certificate of each such Class may be issued
in a different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Certificate Principal Balance of
such Class on the Closing Date. On the Closing Date, the Trustee shall
execute and countersign Physical Certificates all in an aggregate principal
amount that shall equal the Certificate Principal Balance of such Class on
the Closing Date. The Residual Certificates shall each be issued in
certificated fully-registered form. Each Class of Global Certificates, if
any, shall be issued in fully registered form in minimum dollar denominations
of $50,000 and integral multiples of $1.00 in excess thereof, except that one
Certificate of each Class may be in a different denomination so that the sum
of the denominations of all outstanding Certificates of such Class shall
equal the Certificate Principal Balance of such Class on the Closing Date. On
the Closing Date, the Trustee shall execute and countersign (i) in the case
of each Class of Offered Certificates, the Certificate in the entire
Certificate Principal Balance of the respective Class and (ii) in the case of
each Class of Private Certificates, Individual Certificates all in an
aggregate principal amount that shall equal the Certificate Principal Balance
of each such respective Class on the Closing Date. The Certificates referred
to in clause (i) and if at any time there are to be Global Certificates, the
Global Certificates shall be delivered by the Depositor to the Depository or
pursuant to the Depository's instructions, shall be delivered by the
Depositor on behalf of the Depository to and deposited with the DTC
Custodian. The Trustee shall sign the Certificates by facsimile or manual
signature and countersign them by manual signature on behalf of the Trustee
by one or more authorized signatories, each of whom shall be Responsible
Officers of the Trustee or its agent. A Certificate bearing the manual and
facsimile signatures of individuals who were the authorized signatories of
the Trustee or its agent at the time of issuance shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
positions prior to the delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate the
manually executed countersignature of the Trustee or its agent, and such
countersignature upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates issued on the Closing Date shall be dated the
Closing Date. All Certificates issued thereafter shall be dated the date of
their countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
2004-10 REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each 2004-10 REMIC shall have a tax
year that is a calendar year and shall report income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each 2004-10 REMIC to
timely elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
any Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(l) The following legend shall be placed on the Residual Certificates,
whether upon original issuance or upon issuance of any other Certificate of
any such Class in exchange therefor or upon transfer thereof:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER
AFFIDAVIT TO THE MASTER SERVICER AND THE TRUSTEE THAT (1) SUCH
TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE OR POLITICAL
SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES
ARE SUBJECT TO TAX AND EXCEPT FOR XXXXXXX MAC, A MAJORITY OF ITS
BOARD OF DIRECTORS IS NOT SELECTED BY SUCH GOVERNMENTAL UNIT),
(B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) ANY
ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED
IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED
BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO
THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING THE TAX
IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE
INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED
IN SECTION 1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE
PARTNERSHIP UNDER SECTION 775(a) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B), (C), (D) OR (E)
BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR
(F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF
SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX
AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS
RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR
ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL
FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO
BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
Section 5.02 Registration of Transfer and Exchange of Certificates.
(a)The Trustee shall maintain at its Corporate Trust Office a Certificate
Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and
of transfers and exchanges of Certificates as herein provided.
(b) Subject to Section 5.01(a) and, in the case of any Global Certificate
or Physical Certificate upon the satisfaction of the conditions set forth
below, upon surrender for registration of transfer of any Certificate at any
office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate
acknowledges the restrictions on the transfer of such Certificate set forth
in the Securities Legend and agrees that it will transfer such a Certificate
only as provided herein. In addition to the provisions of Section 5.02(h),
the following restrictions shall apply with respect to the transfer and
registration of transfer of an Individual Certificate to a transferee that
takes delivery in the form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual Certificate if
the requested transfer is being made to a transferee who has provided
the Trustee with a Rule 144A Certificate or comparable evidence as to
its QIB status.
(ii) The Trustee shall register the transfer of any Individual Certificate
if (x) the transferor has advised the Trustee in writing that the
Certificate is being transferred to an Institutional Accredited
Investor along with facts surrounding the transfer as set forth in
Exhibit F-3 hereto; and (y) prior to the transfer the transferee
furnishes to the Trustee an Investment Letter (and the Trustee shall be
fully protected in so doing), provided that, if based upon an Opinion
of Counsel addressed to the Trustee to the effect that the delivery of
(x) and (y) above are not sufficient to confirm that the proposed
transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and other applicable laws, the Trustee shall as a
condition of the registration of any such transfer require the
transferor to furnish such other certifications, legal opinions or
other information prior to registering the transfer of an Individual
Certificate as shall be set forth in such Opinion of Counsel.
(d) So long as a Global Certificate of such Class is outstanding and is
held by or on behalf of the Depository, transfers of beneficial interests in
such Global Certificate, or transfers by holders of Individual Certificates
of such Class to transferees that take delivery in the form of beneficial
interests in the Global Certificate, may be made only in accordance with
Section 5.02(h), the rules of the Depository and the following:
(i) In the case of a beneficial interest in the Global Certificate being
transferred to an Institutional Accredited Investor, such transferee
shall be required to take delivery in the form of an Individual
Certificate or Certificates and the Trustee shall register such
transfer only upon compliance with the provisions of Section
5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global Certificates
being transferred to a transferee that takes delivery in the form of an
Individual Certificate or Certificates of such Class, except as set
forth in clause (i) above, the Trustee shall register such transfer
only upon compliance with the provisions of Section 5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class being transferred
to a transferee that takes delivery in the form of a beneficial
interest in a Global Certificate of such Class, the Trustee shall
register such transfer if the transferee has provided the Trustee with
a Rule 144A Certificate or comparable evidence as to its QIB status.
(iv) No restrictions shall apply with respect to the transfer or
registration of transfer of a beneficial interest in the Global
Certificate of a Class to a transferee that takes delivery in the form
of a beneficial interest in the Global Certificate of such Class;
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate
as are sufficient to establish that it is a QIB.
(e) Subject to Section 5.02(h), an exchange of a beneficial interest in a
Global Certificate of a Class for an Individual Certificate or Certificates
of such Class, an exchange of an Individual Certificate or Certificates of a
Class for a beneficial interest in the Global Certificate of such Class and
an exchange of an Individual Certificate or Certificates of a Class for
another Individual Certificate or Certificates of such Class (in each case,
whether or not such exchange is made in anticipation of subsequent transfer,
and, in the case of the Global Certificate of such Class, so long as such
Certificate is outstanding and is held by or on behalf of the Depository) may
be made only in accordance with Section 5.02(h), the rules of the Depository
and the following:
(i) A holder of a beneficial interest in a Global Certificate of a Class
may at any time exchange such beneficial interest for an Individual
Certificate or Certificates of such Class.
(ii) A holder of an Individual Certificate or Certificates of a Class may
exchange such Certificate or Certificates for a beneficial interest in
the Global Certificate of such Class if such holder furnishes to the
Trustee a Rule 144A Certificate or comparable evidence as to its QIB
status.
(iii) A holder of an Individual Certificate of a Class may exchange such
Certificate for an equal aggregate principal amount of Individual
Certificates of such Class in different authorized denominations
without any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of
such Class as provided herein, the Trustee shall cancel such Individual
Certificate and shall (or shall request the Depository to) endorse on the
schedule affixed to the applicable Global Certificate (or on a continuation
of such schedule affixed to the Global Certificate and made a part thereof)
or otherwise make in its books and records an appropriate notation evidencing
the date of such exchange or transfer and an increase in the certificate
balance of the Global Certificate equal to the certificate balance of such
Individual Certificate exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial interest in a
Global Certificate of a Class for an Individual Certificate of such
Class as provided herein, the Trustee shall (or shall request the
Depository to) endorse on the schedule affixed to such Global
Certificate (or on a continuation of such schedule affixed to such
Global Certificate and made a part thereof) or otherwise make in its
books and records an appropriate notation evidencing the date of such
exchange or transfer and a decrease in the certificate balance of such
Global Certificate equal to the certificate balance of such Individual
Certificate issued in exchange therefor or upon transfer thereof.
(g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or
of a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in this
Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance
equal to the minimum authorized denomination set forth in Section 5.01(g) or
any integral multiple of $1,000 in excess thereof) by surrendering such
Certificate at the Corporate Trust Office, or at the office of any transfer
agent, together with an executed instrument of assignment and transfer
satisfactory in form and substance to the Trustee in the case of transfer and
a written request for exchange in the case of exchange. The holder of a
beneficial interest in a Global Certificate may, subject to the rules and
procedures of the Depository, cause the Depository (or its nominee) to notify
the Trustee in writing of a request for transfer or exchange of such
beneficial interest for an Individual Certificate or Certificates. Following
a proper request for transfer or exchange, the Trustee shall, within five
Business Days of such request made at the Corporate Trust Office, sign,
countersign and deliver at the Corporate Trust Office, to the transferee (in
the case of transfer) or holder (in the case of exchange) or send by first
class mail at the risk of the transferee (in the case of transfer) or holder
(in the case of exchange) to such address as the transferee or holder, as
applicable, may request, an Individual Certificate or Certificates, as the
case may require, for a like aggregate Fractional Undivided Interest and in
such authorized denomination or denominations as may be requested. The
presentation for transfer or exchange of any Individual Certificate shall not
be valid unless made at the Corporate Trust Office by the registered holder
in person, or by a duly authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates
to be exchanged at the Corporate Trust Office; provided, however, that no
Certificate may be exchanged for new Certificates unless the original
Fractional Undivided Interest represented by each such new Certificate (i) is
at least equal to the minimum authorized denomination or (ii) is acceptable
to the Depositor as indicated to the Trustee in writing. Whenever any
Certificates are so surrendered for exchange, the Trustee shall sign and
countersign and the Trustee shall deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.
(j) If the Trustee so requires, every Certificate presented or surrendered
for transfer or exchange shall be duly endorsed by, or be accompanied by a
written instrument of transfer, with a signature guarantee, in form
satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(k) No service charge shall be made for any transfer or exchange of
Certificates, but the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
(l) The Trustee shall cancel all Certificates surrendered for transfer or
exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record
retention requirements of the Securities Exchange Act of 1934, as amended,
and thereafter may destroy such Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. (a) If
(i) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of
any Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as it may require to save it harmless, and (iii) the Trustee has
not received notice that such Certificate has been acquired by a third
Person, the Trustee shall sign, countersign and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Fractional Undivided Interest but in each case
bearing a different number. The mutilated, destroyed, lost or stolen
Certificate shall thereupon be canceled of record by the Trustee and shall be
of no further effect and evidence no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected
therewith. Any duplicate Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 6.01 and for all other purposes
whatsoever. Neither the Depositor, the Trustee nor any agent of the Depositor
or the Trustee shall be affected by notice to the contrary. No Certificate
shall be deemed duly presented for a transfer effective on any Record Date
unless the Certificate to be transferred is presented no later than the close
of business on the third Business Day preceding such Record Date.
Section 5.05 Transfer Restrictions on Residual Certificates. (a)Residual
Certificates, or interests therein, may not be transferred without the prior
express written consent of the Tax Matters Person and the Depositor, which
cannot be unreasonably withheld. As a prerequisite to such consent, the
proposed transferee must provide the Tax Matters Person, the Depositor and
the Trustee with an affidavit that the proposed transferee is a Permitted
Transferee (and, unless the Tax Matters Person and the Depositor consent to
the transfer to a person who is not a U.S. Person, an affidavit that it is a
U.S. Person) as provided in Section 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Depositor an affidavit in the form
attached hereto as Exhibit E stating, among other things, that as of the date
of such transfer (i) such transferee is a Permitted Transferee and that (ii)
such transferee is not acquiring such Residual Certificate for the account of
any person who is not a Permitted Transferee. The Tax Matters Person shall
not consent to a transfer of a Residual Certificate if it has actual
knowledge that any statement made in the affidavit issued pursuant to the
preceding sentence is not true. Notwithstanding any transfer, sale or other
disposition of a Residual Certificate to any Person who is not a Permitted
Transferee, such transfer, sale or other disposition shall be deemed to be of
no legal force or effect whatsoever and such Person shall not be deemed to be
a Holder of a Residual Certificate for any purpose hereunder, including, but
not limited to, the receipt of distributions thereon. If any purported
transfer shall be in violation of the provisions of this Section 5.05(b),
then the prior Holder thereof shall, upon discovery that the transfer of such
Residual Certificate was not in fact permitted by this Section 5.05(b), be
restored to all rights as a Holder thereof retroactive to the date of the
purported transfer. None of the Trustee, the Tax Matters Person or the
Depositor shall be under any liability to any Person for any registration or
transfer of a Residual Certificate that is not permitted by this Section
5.05(b) or for making payments due on such Residual Certificate to the
purported Holder thereof or taking any other action with respect to such
purported Holder under the provisions of this Agreement so long as the
written affidavit referred to above was received with respect to such
transfer, and the Tax Matters Person, the Trustee and the Depositor, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that
was in fact not a permitted transferee under this Section 5.05(b) at the time
it became a Holder all payments made on such Residual Certificate. Each
Holder of a Residual Certificate, by acceptance thereof, shall be deemed for
all purposes to have consented to the provisions of this Section 5.05(b) and
to any amendment of this Agreement deemed necessary (whether as a result of
new legislation or otherwise) by counsel of the Tax Matters Person or the
Depositor to ensure that the Residual Certificates are not transferred to any
Person who is not a Permitted Transferee and that any transfer of such
Residual Certificates will not cause the imposition of a tax upon the Trust
or cause any 2004-10 REMIC to fail to qualify as a REMIC.
(c) Unless the Tax Matters Person shall have consented in writing (which
consent may be withheld in the Tax Matters Person's sole discretion), the
Residual Certificates (including a beneficial interest therein) may not be
purchased by or transferred to any person who is not a United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees to be
a Tax Matters Person if it is the Holder of the largest percentage interest
of such Certificate, and appoints the Securities Administrator to act as its
agent with respect to all matters concerning the tax obligations of the Trust.
Section 5.06 Restrictions on Transferability of Certificates. (a)No
offer, sale, transfer or other disposition (including pledge) of any
Certificate shall be made by any Holder thereof unless registered under the
Securities Act, or an exemption from the registration requirements of the
Securities Act and any applicable state securities or "Blue Sky" laws is
available and the prospective transferee (other than the Depositor) of such
Certificate signs and delivers to the Trustee an Investment Letter, if the
transferee is an Institutional Accredited Investor, in the form set forth as
Exhibit F-l hereto, or a Rule 144A Certificate, if the transferee is a QIB,
in the form set forth as Exhibit F-2 hereto. Notwithstanding the provisions
of the immediately preceding sentence, no restrictions shall apply with
respect to the transfer or registration of transfer of a beneficial interest
in any Certificate that is a Global Certificate of a Class to a transferee
that takes delivery in the form of a beneficial interest in the Global
Certificate of such Class provided that each such transferee shall be deemed
to have made such representations and warranties contained in the Rule 144A
Certificate as are sufficient to establish that it is a QIB. In the case of a
proposed transfer of any Certificate to a transferee other than a QIB, the
Trustee may require an Opinion of Counsel that such transaction is exempt
from the registration requirements of the Securities Act. The cost of such
opinion shall not be an expense of the Trustee or the Trust Fund.
(b) The Private Certificates shall each bear a Securities Legend.
Section 5.07 ERISA Restrictions. (a)Subject to the provisions of
subsection (b), no Residual Certificates or Private Certificates may be
acquired directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement (a "Plan") that is subject to Title I of
ERISA and/or Section 4975 of the Code, or by a person using "plan assets" of
a Plan, unless the proposed transferee provides the Trustee with an Opinion
of Counsel for the benefit of the Trustee, the Master Servicer and the
Securities Administrator and on which they may rely which is the satisfactory
to the Trustee, which opinion will not be at the expense of the Trustee, the
Master Servicer or the Securities Administrator, that the purchase of such
Certificates by or on behalf of such Plan is permissible under applicable
law, will not constitute or result in a nonexempt prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Trustee, the
Master Servicer or the Securities Administrator to any obligation in addition
to those undertaken in the Agreement.
(b) Any Person acquiring an interest in a Global Certificate which is a
Private Certificate, by acquisition of such Certificate, shall be deemed to
have represented to the Trustee that it is not acquiring an interest in such
Certificate directly or indirectly by, or on behalf of, or with "plan assets"
of, an employee benefit plan or other retirement arrangement which is subject
to Title I of ERISA and/or Section 4975 of the Code.
(c) Each beneficial owner of a Class M-1, Class M-2, Class B-1 or Class B-2
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) such Certificate is rated at least "BBB-" or its equivalent
by Fitch, S&P or Xxxxx'x, (ii) such beneficial owner is not a Plan or
investing with "plan assets" of any Plan, or (iii) (1) it is an insurance
company, (2) the source of funds used to acquire or hold the certificate or
interest therein is an "insurance company general account," as such term is
defined in Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the
conditions in Sections I and III of PTCE 95-60 have been satisfied.
(d) None of the Trustee, the Master Servicer, or the Securities
Administrator will be required to monitor, determine or inquire as to
compliance with the transfer restrictions with respect to the Global
Certificates. Any attempted or purported transfer of any Certificate in
violation of the provisions of Sections (a), (b) or (c) above shall be void
ab initio and such Certificate shall be considered to have been held
continuously by the prior permitted Certificateholder. Any transferor of any
Certificate in violation of such provisions, shall indemnify and hold
harmless the Trustee, the Master Servicer and the Securities Administrator
from and against any and all liabilities, claims, costs or expenses incurred
by the Trustee, the Master Servicer or the Securities Administrator as a
result of such attempted or purported transfer. The Trustee shall have no
liability for transfer of any such Global Certificates in or through
book-entry facilities of any Depository or between or among Depository
Participants or Certificate Owners made in violation of the transfer
restrictions set forth herein.
Section 5.08 Rule 144A Information. For so long as any Private
Certificates are outstanding, (1) the Depositor will provide or cause to be
provided to any holder of such Private Certificates and any prospective
purchaser thereof designated by such a holder, upon the request of such
holder or prospective purchaser, the information required to be provided to
such holder or prospective purchaser by Rule 144A(d)(4) under the Securities
Act; and (2) the Depositor shall update such information from time to time in
order to prevent such information from becoming false and misleading and will
take such other actions as are necessary to ensure that the safe harbor
exemption from the registration requirements of the Securities Act under Rule
144A is and will be available for resales of such Private Certificates
conducted in accordance with Rule 144A.
ARTICLE VI
Payments to Certificateholders
Section 6.01 Distributions on the Certificates. (a)On each Distribution
Date, an amount equal to the Interest Funds and Principal Funds for such
Distribution Date shall be withdrawn by the Trustee from the Distribution
Account to the extent of funds on deposit therein and distributed as directed
in accordance with distribution instructions provided to it by the Securities
Administrator for such Distribution Date, in the following order of priority:
First, Interest Funds will be distributed, in the following manner and
order of priority:
1. From Interest Funds in respect of:
(a) Loan Group I, to the Class I-A Certificates, the
Current Interest and then any Interest Carry Forward Amount for
each such Class, pro rata, based on the Current Interest and
Interest Carry Forward Amount due each such Class; and
(b) Loan Group II, to the Class II-A Certificates, the
Current Interest and then any Interest Carry Forward Amount for
each such Class, pro rata, based on the Current Interest and
Interest Carry Forward Amount due each such Class;
2. From remaining Interest Funds in respect of:
(a) Loan Group I, to the Class II-A Certificates, the
Current Interest and any Interest Carry Forward Amount for each
such Class to the extent not paid in clauses 1(b) above, pro rata
based on the remaining amounts owed to each such Class; and
(b) Loan Group II, to the Class I-A Certificates, the
Current Interest and any Interest Carry Forward Amount for each
such Class to the extent not paid in clauses 1(a) above, pro rata
based on the remaining amounts owed to each such Class;
3. From remaining Interest Funds in respect of both Loan
Groups, to the Class M-1, the Class M-2, Class B-1 and Class B-2
Certificates, sequentially, in that order, the Current Interest for
each such Class;
4. Any Excess Spread, to the extent necessary to cause the
Overcollateralization Amount to equal to the Overcollateralization
Target Amount, will be the Extra Principal Distribution Amount and will
be included as part of the Principal Distribution Amount and
distributed in accordance with second (A) and (B) below; and
5. Any Remaining Excess Spread will be applied as Excess
Cashflow pursuant to clauses Third through Twelfth below.
On any Distribution Date, any shortfalls resulting from the application
of the Relief Act and any Prepayment Interest Shortfalls to the extent not
covered by Compensating Interest Payments will be allocated as set forth in
the definition of Current Interest herein.
Second, to pay as principal on the Certificates entitled to payments of
principal, in the following order of priority:
(A) For each Distribution Date (i) prior to the Stepdown Date or (ii)
on which a Trigger Event is in effect, from the Principal Funds and the
Extra Principal Distribution Amount for such Distribution Date:
1. (a) To the Class I-A Certificates, an amount equal to the
Group I Principal Distribution Amount will be distributed pro rata
between:
(i) the Class I-A-1 Certificates until the Certificate
Principal Balance thereof is reduced to zero; and
(ii) the Class I-A-2 Certificates and the Class I-A-3
Certificates, sequentially, in that order, in each case until the
Certificate Principal Balance of such Class has been reduced to
zero; and
(b) To the Class II-A-1 Certificates and Class II-A-2
Certificates, on a pro rata basis, an amount equal to the Group II
Principal Distribution Amount will be distributed until the Certificate
Principal Balance of each such Class is reduced to zero;
2. To the Class M-1 Certificates, any remaining Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero;
3. To the Class M-2 Certificates, any remaining Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero;
4. To the Class B-1 Certificates, any remaining Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero; and
5. To the Class B-2 Certificates, any remaining Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero.
(B) For each Distribution Date on or after the Stepdown Date, so long
as a Trigger Event is not in effect, from the Principal Funds and the
Extra Principal Distribution Amount for such Distribution Date:
1. (a) To the Class I-A Certificates, an amount equal to the
Class I-A Principal Distribution Amount will be distributed pro rata
between:
(i) the Class I-A-1 Certificates until the Certificate
Principal Balance thereof is reduced to zero; and
(ii) the Class I-A-2 Certificates and the Class I-A-3
Certificates, sequentially, in that order, in each case until the
Certificate Principal Balance of such Class has been reduced to
zero; and
(b) To the Class II-A-1 Certificates and Class II-A-2
Certificates, on a pro rata basis, an amount equal to the Class II-A
Principal Distribution Amount will be distributed, until the
Certificate Principal Balance of each such Class is reduced to zero;
2. To the Class M-1 Certificates, from any remaining Principal
Distribution Amount, the Class M-1 Principal Distribution Amount, until
the Certificate Principal Balance thereof is reduced to zero;
3. To the Class M-2 Certificates, from any remaining Principal
Distribution Amount, the Class M-2 Principal Distribution Amount, until
the Certificate Principal Balance thereof is reduced to zero;
4. To the Class B-1 Certificates, from any remaining Principal
Distribution Amount, the Class B-1 Principal Distribution Amount, until
the Certificate Principal Balance thereof is reduced to zero; and
5. To the Class B-2 Certificates, from any remaining Principal
Distribution Amount, the Class B-2 Principal Distribution Amount, until
the Certificate Principal Balance thereof is reduced to zero.
Notwithstanding the provisions of clauses Second (A) and (B) above, if
on any Distribution Date the Certificates in a Certificate Group are no
longer outstanding, the portion of the Principal Distribution Amount or the
related Class A Principal Distribution Amount, as applicable, otherwise
allocable to such Certificate Group will be distributed to the Class of
Certificates in the other Certificate Group until the Certificate Principal
Balance of each such Class is reduced to zero.
Third, from any remaining Excess Cashflow, the following amounts to the
Class A Certificates, pro rata among the Classes based on the amount due: (a)
any Interest Carry Forward Amount to the extent not paid pursuant to clause
First 1 and 2 above and then (b) any Unpaid Realized Loss Amount, in each
case for such Class for such Distribution Date;
Fourth, from any remaining Excess Cashflow, the following amounts to
the Class M-1 Certificates: (a) any Interest Carry Forward Amount and then
(b) any Unpaid Realized Loss Amount, in each case for such Class for such
Distribution Date;
Fifth, from any remaining Excess Cashflow, the following amounts to the
Class M-2 Certificates: (a) any Interest Carry Forward Amount and then (b)
any Unpaid Realized Loss Amount, in each case for such Class for such
Distribution Date;
Sixth, from any remaining Excess Cashflow, the following amounts to the
Class B-1 Certificates: (a) any Interest Carry Forward Amount and then (b)
any Unpaid Realized Loss Amount, in each case for such Class for such
Distribution Date;
Seventh, from any remaining Excess Cashflow, the following amounts to
the Class B-2 Certificates: (a) any Interest Carry Forward Amount and then
(b) any Unpaid Realized Loss Amount, in each case for such Class for such
Distribution Date;
Eighth, from any remaining Excess Cashflow, to each Class of Class A
Certificates, any Basis Risk Shortfall and any Basis Risk Shortfall
Carryforward Amount for each such Class for such Distribution Date, pro rata
based on the Basis Risk Shortfall and Basis Risk Shortfall Carryforward
Amount owed to such Class;
Ninth, from any remaining Excess Cashflow, to the Class M-1, Class M-2,
Class B-1 and Class B-2 Certificates, in that order, any Basis Risk Shortfall
and any Basis Risk Shortfall Carryforward Amount, in each case for such Class
for such Distribution Date;
Tenth, from any remaining Excess Cashflow, to the Class B-IO
Certificates, the Class B-IO Distribution Amount;
Eleventh, from any remaining Excess Cashflow, to the Class B-IO
Certificates, any unreimbursed Class B-IO Advanced Amounts; and
Twelfth, any remaining amounts to the Residual Certificates.
All payments of amounts in respect of Basis Risk Shortfall or Basis
Risk Shortfall Carryforward Amount made pursuant to the provisions of this
paragraph (a) shall, for federal income tax purposes, be deemed to have been
distributed from REMIC III to the holder of the Class B-IO Certificates and
then paid outside of any 2004-10 REMIC to the recipients thereof pursuant to
an interest rate cap contract. By accepting their Certificates the holders
of the Certificates agree so to treat such payments for purposes of filing
their income tax returns.
(b) On each Distribution Date, the related Cap Contract Payment Amount with
respect to such Payment Date shall be distributed in the following order of
priority, in each case to the extent of amounts available:
(i) first, to the holders of the related Class or Classes of Certificates,
the payment of any Basis Risk Shortfall or Basis Risk Shortfall Carry
Forward Amount for such Distribution Date, and in the case of the Class
I-A Certificates or the Class II-A Certificates, pro rata, based on
the Basis Risk Shortfall or Basis Risk Shortfall Carry Forward Amounts
owed to each such Class, to the extent not covered by Excess Cashflow
for such Distribution Date;
(ii) second, from any remaining amounts, the payment of an amount equal to
any Current Interest and Interest Carry Forward Amount for the related
Class or Classes of Certificates, and in the case of the Class I-A Certificates
or the Class II-A Certificates, pro rata, based on the Current
Interest and Interest Carry Forward Amounts owed to each such Class, to
the extent not covered by Interest Funds or Excess Cashflow on such
Distribution Date;
(iii) third, from any remaining amounts, available from the Cap Contracts
relating to the Class I-A Certificates and Class II-A Certificates, to
the Class M-1, the Class M-2, the Class B-1 and the Class B-2
Certificates, in that order, to the extent not paid pursuant to clauses
(i) or (ii) above; and
(iv) to the Class B-IO Certificates, any remaining amount.
All Cap Contract Payment Amounts made with respect to Current Interest
and Interest Carry Forward Amounts will be treated, for federal income tax
purposes, as reimbursable advances ("Class B-IO Advances") made from the
holder of the Class B-IO Certificates. Such Class B-IO Advances will be paid
back to the holder of the Class B-IO Certificate pursuant to Section 6.01(a).
(c) On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Prepayment Charge Loans received during the related
Prepayment Period will be withdrawn from the Distribution Account and
distributed by the Trustee to the Class XP Certificates and shall not be
available for distribution to the holders of any other Class of Certificates.
The payment of such Prepayment Charges shall not reduce the Certificate
Principal Balance of the Class XP Certificates. In addition, as provided in
Section 4.07 hereof, on the Distribution Date immediately following the
Prepayment Period in which the last Prepayment Charge is collectible on the
Prepayment Charge Loans, which Prepayment Period is the month of June 2010,
the Trustee shall distribute the amount on deposit in the Class XP Reserve
Account to the Class XP Certificates in reduction of the Certificate
Principal Balance thereof until the Certificate Principal Balance thereof is
reduced to zero.
(d) The expenses and fees of the Trust shall be paid by each of the 2004-10
REMICs, to the extent that such expenses relate to the assets of each of such
respective 2004-10 REMICs, and all other expenses and fees of the Trust shall
be paid pro rata by each of the 2004-10 REMICs.
Section 6.02 Allocation of Losses; Subsequent Recoveries. (a) On or
prior to each Determination Date, the Master Servicer shall determine the
amount of any Realized Loss in respect of each Mortgage Loan that occurred
during the immediately preceding calendar month. Any Realized Losses with
respect to the Mortgage Loans shall be applied on each Distribution Date
after the distributions provided for in Section 6.01, in reduction of the
Certificate Principal Balance of the Class or Classes of Certificates to the
extent provided in the definition of Applied Realized Loss Amount.
(b) In addition, in the event that the Master Servicer receives any
Subsequent Recoveries from a Servicer, the Master Servicer shall deposit such
funds into the Master Servicer Collection Account pursuant to Section
4.01(c)(ii). If, after taking into account such Subsequent Recoveries, the
amount of a Realized Loss is reduced, the amount of such Subsequent
Recoveries will be applied to increase the Certificate Principal Balance of
the Class of Subordinate Certificates with the highest payment priority to
which Applied Realized Loss Amounts have been allocated, but not by more than
the amount of Applied Realized Loss Amounts previously allocated to that
Class of Subordinate Certificates. The amount of any remaining Subsequent
Recoveries will be applied to sequentially increase the Certificate Principal
Balance of the Subordinate Certificates, beginning with the Class of
Subordinate Certificates with the next highest payment priority, up to the
amount of such Applied Realized Loss Amounts previously allocated to such
Class or Classes of Certificates. Holders of such Certificates will not be
entitled to any payments in respect of Current Interest on the amount of such
increases for any Interest Accrual Period preceding the Distribution Date on
which such increase occurs. Any such increases shall be applied to the
Certificate Principal Balance of each Subordinate Certificate of such Class
in accordance with its respective Fractional Undivided Interest.
Section 6.03 Payments. (a)On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each
Certificateholder of record on the directly preceding Record Date the
Certificateholder's pro rata share of its Class (based on the aggregate
Fractional Undivided Interest represented by such Holder's Certificates) of
all amounts required to be distributed on such Distribution Date to such
Class, based on information provided to the Securities Administrator by the
Master Servicer. The Securities Administrator shall calculate the amount to
be distributed to each Class and, based on such amounts, the Securities
Administrator shall determine the amount to be distributed to each
Certificateholder. All of the Securities Administrator's calculations of
payments shall be based solely on information provided to the Securities
Administrator by the Master Servicer. The Securities Administrator shall not
be required to confirm, verify or recompute any such information but shall be
entitled to rely conclusively on such information.
(b) Payment of the above amounts to each Certificateholder shall be made
(i) by check mailed to each Certificateholder entitled thereto at the address
appearing in the Certificate Register or (ii) upon receipt by the Trustee on
or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder by wire transfer to a United States
dollar account maintained by the payee at any United States depository
institution with appropriate facilities for receiving such a wire transfer;
provided, however, that the final payment in respect of each Class of
Certificates will be made only upon presentation and surrender of such
respective Certificates at the office or agency of the Trustee specified in
the notice to Certificateholders of such final payment.
Section 6.04 Statements to Certificateholders. (a)Concurrently with each
distribution to Certificateholders, the Securities Administrator shall make
available to the parties hereto and each Certificateholder via the Securities
Administrator's internet website as set forth below, the following
information, expressed with respect to clauses (i) through (vii) in the
aggregate and as a Fractional Undivided Interest representing an initial
Certificate Principal Balance of $1,000, in the case of the Class B-IO
Certificates, a Notional Amount of $1,000:
(i) the Certificate Principal Balance or Notional Amount of each Class of
Certificates immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on each
applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related Pass-Through
Rate with respect to each Class during the related Interest Accrual
Period;
(iv) the Net Interest Shortfall and any other adjustments to interest at the
related Pass-Through Rate necessary to account for any difference
between interest accrued and aggregate interest distributed with
respect to each Class of Certificates;
(v) the amount of the distribution allocable to interest on each Class of
Certificates;
(vi) the Pass-Through Rates for each Class of Certificates with respect to
such Distribution Date;
(vii) the Certificate Principal Balance of each Class of Certificates after
such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating Interest
Payments and outstanding unreimbursed advances by the Servicer or the
Master Servicer included in such distribution, separately stated for
each Loan Group;
(ix) the aggregate amount of any Realized Losses (listed separately for each
category of Realized Loss and for each Loan Group) during the related
Prepayment Period and cumulatively since the Cut-off Date and the
amount and source (separately identified) of any distribution in
respect thereof included in such distribution;
(x) with respect to each Mortgage Loan which incurred a Realized Loss
during the related Prepayment Period, (i) the loan number, (ii) the
Stated Principal Balance of such Mortgage Loan as of the Cut-off Date,
(ii) the Stated Principal Balance of such Mortgage Loan for such
Distribution Date, (iii) the Net Liquidation Proceeds with respect to
such Mortgage Loan and (iv) the amount of the Realized Loss with
respect to such Mortgage Loan;
(xi) with respect to each Loan Group, the amount of Scheduled Principal and
Principal Prepayments, (including but separately identifying the
principal amount of principal prepayments, Insurance Proceeds, the
purchase price in connection with the purchase of Mortgage Loans, cash
deposits in connection with substitutions of Mortgage Loans and Net
Liquidation Proceeds) and the number and principal balance of Mortgage
Loans purchased or substituted for during the relevant period and
cumulatively since the Cut-off Date;
(xii) the number of Mortgage Loans (excluding REO Property) in each Loan
Group remaining in the Trust Fund as of the end of the related
Prepayment Period;
(xiii) information for each Loan Group in the aggregate regarding any
Mortgage Loan delinquencies as of the end of the related Prepayment
Period, including the aggregate number and aggregate Outstanding
Principal Balance of Mortgage Loans (a) delinquent 30 to 59 days on a
contractual basis, (b) delinquent 60 to 89 days on a contractual basis,
and (c) delinquent 90 or more days on a contractual basis, in each case
as of the close of business on the last Business Day of the immediately
preceding month;
(xiv) for each Loan Group the number of Mortgage Loans in the foreclosure
process as of the end of the related Due Period and the aggregate
Outstanding Principal Balance of such Mortgage Loans;
(xv) for each Loan Group the number and aggregate Outstanding Principal
Balance of all Mortgage Loans as to which the Mortgaged Property was
REO Property as of the end of the related Due Period;
(xvi) the book value (the sum of (A) the Outstanding Principal Balance of the
Mortgage Loan, (B) accrued interest through the date of foreclosure and
(C) foreclosure expenses) of any REO Property in each Loan Group;
provided that, in the event that such information is not available to
the Securities Administrator on the Distribution Date, such information
shall be furnished promptly after it becomes available;
(xvii) the amount of Realized Losses allocated to each Class of
Certificates since the prior Distribution Date and in the aggregate for
all prior Distribution Dates;
(xviii) the Interest Carry Forward Amount and any Basis Risk Shortfall
Carry Forward Amount for each Class of Certificates;
(xix) the amount of such distribution to Holders of each Class allocable to
interest and the portion thereof, if any, provided by the Cap Contracts;
(xx) the cumulative amount of Applied Realized Loss Amounts to date; and
(xxi) whether a Trigger Event exists.
The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the
extent of, information provided to the Securities Administrator by the Master
Servicer. The Securities Administrator may conclusively rely on such
information and shall not be required to confirm, verify or recalculate any
such information.
The Securities Administrator may make available each month, to any
interested party, the monthly statement to Certificateholders via the
Securities Administrator's website initially located at "xxx.xxxxxxx.xxx."
Assistance in using the website can be obtained by calling the Securities
Administrator's customer service desk at (000) 000-0000. Parties that are
unable to use the above distribution option are entitled to have a paper copy
mailed to them via first class mail by calling the Securities Administrator's
customer service desk and indicating such. The Securities Administrator shall
have the right to change the way such reports are distributed in order to
make such distribution more convenient and/or more accessible to the parties,
and the Securities Administrator shall provide timely and adequate
notification to all parties regarding any such change.
To the extent timely received from the Securities Administrator, the
Trustee will also make monthly statements available each month to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at xxx.xxxxxxxx.xxx/xxx. Assistance in
using the Trustee's website service can be obtained by calling the Trustee's
customer service desk at (000) 000-0000.
(b) Within a reasonable period of time after the end of the preceding
calendar year beginning in 2005, the Trustee will furnish such report to each
Holder of the Certificates of record at any time during the prior calendar
year as to the aggregate of amounts reported pursuant to subclauses (a)(ii)
and (a)(v) above with respect to the Certificates, plus information with
respect to the amount of servicing compensation and such other customary
information as the Securities Administrator may determine and advises the
Trustee to be necessary and/or to be required by the Internal Revenue Service
or by a federal or state law or rules or regulations to enable such Holders
to prepare their tax returns for such calendar year. Such obligations shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Securities Administrator or the Trustee
pursuant to the requirements of the Code.
Section 6.05 Monthly Advances. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date and is Delinquent other than as a
result of application of the Relief Act and for which the related Servicer
was required to make an advance pursuant to the related Servicing Agreement
exceeds the amount deposited in the Master Servicer Collection Account which
will be used for an advance with respect to such Mortgage Loan, the Master
Servicer will deposit in the Master Servicer Collection Account not later
than the Distribution Account Deposit Date immediately preceding the related
Distribution Date an amount equal to such deficiency, net of the Servicing
Fee for such Mortgage Loan except to the extent the Master Servicer
determines any such advance to be a Nonrecoverable Advance. Subject to the
foregoing, the Master Servicer shall continue to make such advances through
the date that the related Servicer is required to do so under its Servicing
Agreement. If the Master Servicer deems an advance to be a Nonrecoverable
Advance, on the Distribution Account Deposit Date, the Master Servicer shall
present an Officer's Certificate to the Trustee (i) stating that the Master
Servicer elects not to make a Monthly Advance in a stated amount and (ii)
detailing the reason it deems the advance to be a Nonrecoverable Advance.
Section 6.06 Compensating Interest Payments. The Master Servicer shall
deposit in the Master Servicer Collection Account not later than each
Distribution Account Deposit Date an amount equal to the lesser of (i) the
sum of the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to Prepayment Interest Shortfalls for the
related Distribution Date, and not so paid by the related Servicers and (ii)
the Master Servicing Compensation for such Distribution Date (such amount,
the "Compensating Interest Payment"). The Master Servicer shall not be
entitled to any reimbursement of any Compensating Interest Payment.
ARTICLE VII
The Master Servicer
Section 7.01 Liabilities of the Master Servicer. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02 Merger or Consolidation of the Master Servicer.
The Master Servicer will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the state of its
incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement, the Certificates or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation
to which the Master Servicer shall be a party, or any Person succeeding to
the business of the Master Servicer, shall be the successor of the Master
Servicer hereunder, without the execution or filing of any paper or further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03 Indemnification of the Trustee, the Master Servicer and the
Securities Administrator. (a)The Master Servicer agrees to indemnify the
Indemnified Persons for, and to hold them harmless against, any loss,
liability or expense (including reasonable legal fees and disbursements of
counsel) incurred on their part that may be sustained in connection with,
arising out of, or relating to, any claim or legal action (including any
pending or threatened claim or legal action) relating to this Agreement, the
Servicing Agreements, the Assignment Agreements or the Certificates or the
powers of attorney delivered by the Trustee hereunder (i) related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or (ii) incurred by reason of the
Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided, in each case, that with respect
to any such claim or legal action (or pending or threatened claim or legal
action), the Trustee shall have given the Master Servicer and the Depositor
written notice thereof promptly after the Trustee shall have with respect to
such claim or legal action knowledge thereof. The Trustee's failure to
deliver any such notice shall not affect the Trustee's right to
indemnification hereunder, except to the extent the Master Servicer is
materially prejudiced by such failure to give notice. This indemnity shall
survive the resignation or removal of the Trustee, Master Servicer or the
Securities Administrator and the termination of this Agreement.
(b) The Depositor will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise covered by the
Master Servicer's indemnification pursuant to Section (a) above.
Section 7.04 Limitations on Liability of the Master Servicer and Others.
Subject to the obligation of the Master Servicer to indemnify the Indemnified
Persons pursuant to Section 7.03:
(a) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to
the Indemnified Persons, the Depositor, the Trust Fund or the
Certificateholders for taking any action or for refraining from taking any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Master Servicer
or any such Person against any breach of warranties or representations made
herein or any liability which would otherwise be imposed by reason of such
Person's willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder.
(b) The Master Servicer and any director, officer, employee or agent of the
Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder.
(c) The Master Servicer, the Custodian and any director, officer, employee
or agent of the Master Servicer or the Custodian shall be indemnified by the
Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on
their part that may be sustained in connection with, arising out of, or
related to, any claim or legal action (including any pending or threatened
claim or legal action) relating to this Agreement, the Certificates or any
Servicing Agreement (except to the extent that the Master Servicer is
indemnified by the Servicer thereunder), other than (i) any such loss,
liability or expense related to the Master Servicer's failure to perform its
duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement), or to
the Custodian's failure to perform its duties under the Custodial Agreement,
respectively, or (ii) any such loss, liability or expense incurred by reason
of the Master Servicer's or the Custodian's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or under the
Custodial Agreement, as applicable, or by reason of reckless disregard of
obligations and duties hereunder or under the Custodial Agreement, as
applicable.
(d) The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties
under this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, the Master Servicer may in its discretion, with
the consent of the Trustee (which consent shall not be unreasonably
withheld), undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Master Servicer shall be entitled to be reimbursed therefor out of the Master
Servicer Collection Account as provided by Section 4.03. Nothing in this
Section 7.04(d) shall affect the Master Servicer's obligation to supervise,
or to take such actions as are necessary to ensure, the servicing and
administration of the Mortgage Loans pursuant to Section 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement,
the Master Servicer shall not be required to investigate or make
recommendations concerning potential liabilities which the Trust might incur
as a result of such course of action by reason of the condition of the
Mortgaged Properties but shall give notice to the Trustee if it has notice of
such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of
any Servicer, except as otherwise expressly provided herein.
Section 7.05 Master Servicer Not to Resign. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a determination that any such duties
hereunder are no longer permissible under applicable law and such
impermissibility cannot be cured. Any such determination permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of
Independent Counsel to such effect delivered to the Trustee. No such
resignation by the Master Servicer shall become effective until EMC or the
Trustee or a successor to the Master Servicer reasonably satisfactory to the
Trustee shall have assumed the responsibilities and obligations of the Master
Servicer in accordance with Section 8.02 hereof. The Trustee shall notify the
Rating Agencies of the resignation of the Master Servicer.
Section 7.06 Successor Master Servicer. In connection with the
appointment of any successor master servicer or the assumption of the duties
of the Master Servicer, EMC or the Trustee may make such arrangements for the
compensation of such successor master servicer out of payments on the
Mortgage Loans as EMC or the Trustee and such successor master servicer shall
agree. If the successor master servicer does not agree that such market value
is a fair price, such successor master servicer shall obtain two quotations
of market value from third parties actively engaged in the servicing of
single-family mortgage loans. Notwithstanding the foregoing, the compensation
payable to a successor master servicer may not exceed the compensation which
the Master Servicer would have been entitled to retain if the Master Servicer
had continued to act as Master Servicer hereunder.
Section 7.07 Sale and Assignment of Master Servicing. The Master
Servicer may sell and assign its rights and delegate its duties and
obligations in its entirety as Master Servicer under this Agreement and EMC
may terminate the Master Servicer without cause and select a new Master
Servicer; provided, however, that: (i) the purchaser or transferee accepting
such assignment and delegation (a) shall be a Person which shall be qualified
to service mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall have a net
worth of not less than $10,000,000 (unless otherwise approved by each Rating
Agency pursuant to clause (ii) below); (c) shall be reasonably satisfactory
to the Trustee (as evidenced in a writing signed by the Trustee); and (d)
shall execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant
and condition to be performed or observed by it as master servicer under this
Agreement, any custodial agreement from and after the effective date of such
agreement; (ii) each Rating Agency shall be given prior written notice of the
identity of the proposed successor to the Master Servicer and each Rating
Agency's rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or
withdrawn as a result of such assignment, sale and delegation, as evidenced
by a letter to such effect delivered to the Master Servicer and the Trustee;
(iii) the Master Servicer assigning and selling the master servicing shall
deliver to the Trustee an Officer's Certificate and an Opinion of Independent
Counsel addressed to the Trustee, each stating that all conditions precedent
to such action under this Agreement have been completed and such action is
permitted by and complies with the terms of this Agreement; and (iv) in the
event the Master Servicer is terminated without cause by EMC, EMC shall pay
the terminated Master Servicer a termination fee equal to 0.25% of the
aggregate Stated Principal Balance of the Mortgage Loans at the time the
master servicing of the Mortgage Loans is transferred to the successor Master
Servicer. No such assignment or delegation shall affect any liability of the
Master Servicer arising prior to the effective date thereof.
ARTICLE VIII
Default
Section 8.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body) and only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the Distribution
Account any amount so required to be deposited pursuant to this
Agreement (other than a Monthly Advance), and such failure continues
unremedied for a period of three Business Days after the date upon
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer; or
(ii) The Master Servicer fails to observe or perform in any material respect
any other material covenants and agreements set forth in this Agreement
to be performed by it, which covenants and agreements materially affect
the rights of Certificateholders, and such failure continues unremedied
for a period of 60 days after the date on which written notice of such
failure, properly requiring the same to be remedied, shall have been
given to the Master Servicer by the Trustee or to the Master Servicer
and the Trustee by the Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator
in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or
an involuntary case is commenced against the Master Servicer under any
applicable insolvency or reorganization statute and the petition is not
dismissed within 60 days after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or substantially all of its property;
or the Master Servicer admits in writing its inability to pay its debts
generally as they become due, files a petition to take advantage of any
applicable insolvency or reorganization statute, makes an assignment
for the benefit of its creditors, or voluntarily suspends payment of
its obligations;
(v) The Master Servicer assigns or delegates its duties or rights under
this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 7.05 or 7.07; or
(vi) The Master Servicer fails to deposit, or cause to be deposited, in the
Distribution Account any Monthly Advance (other than a Nonrecoverable
Advance) by 5:00 p.m. New York City time on the Distribution Account
Deposit Date.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, and with the consent of EMC, may
terminate all of the rights and obligations (but not the liabilities) of the
Master Servicer under this Agreement and in and to the Mortgage Loans and/or
the REO Property serviced by the Master Servicer and the proceeds thereof.
Upon the receipt by the Master Servicer of the written notice, all authority
and power of the Master Servicer under this Agreement, whether with respect
to the Certificates, the Mortgage Loans, REO Property or under any other
related agreements (but only to the extent that such other agreements relate
to the Mortgage Loans or related REO Property) shall, subject to Section
8.02, automatically and without further action pass to and be vested in the
Trustee pursuant to this Section 8.01; and, without limitation, the Trustee
is hereby authorized and empowered to execute and deliver, on behalf of the
Master Servicer as attorney-in-fact or otherwise, any and all documents and
other instruments and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, whether
to complete the transfer and endorsement or assignment of the Mortgage Loans
and related documents, or otherwise. The Master Servicer agrees to cooperate
with the Trustee in effecting the termination of the Master Servicer's rights
and obligations hereunder, including, without limitation, the transfer to the
Trustee of (i) the property and amounts which are then or should be part of
the Trust or which thereafter become part of the Trust; and (ii) originals or
copies of all documents of the Master Servicer reasonably requested by the
Trustee to enable it to assume the Master Servicer's duties thereunder. In
addition to any other amounts which are then, or, notwithstanding the
termination of its activities under this Agreement, may become payable to the
Master Servicer under this Agreement, the Master Servicer shall be entitled
to receive, out of any amount received on account of a Mortgage Loan or
related REO Property, that portion of such payments which it would have
received as reimbursement under this Agreement if notice of termination had
not been given. The termination of the rights and obligations of the Master
Servicer shall not affect any obligations incurred by the Master Servicer
prior to such termination.
Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 8.01 shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy,
immediately terminate all of the rights and obligations of the Master
Servicer thereafter arising under this Agreement, but without prejudice to
any rights it may have as a Certificateholder or to reimbursement of Monthly
Advances and other advances of its own funds, and the Trustee shall act as
provided in Section 8.02 to carry out the duties of the Master Servicer,
including the obligation to make any Monthly Advance, the nonpayment of which
was an Event of Default described in clause (vi) of this Section 8.01. Any
such action taken by the Trustee must be prior to the distribution on the
relevant Distribution Date.
Section 8.02 Trustee to Act; Appointment of Successor. (a)Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the
effect that the Master Servicer is legally unable to act or to delegate its
duties to a Person which is legally able to act, the Trustee shall
automatically become the successor in all respects to the Master Servicer in
its capacity under this Agreement and the transactions set forth or provided
for herein and shall thereafter be subject to all the responsibilities,
duties, liabilities and limitations on liabilities relating thereto placed on
the Master Servicer by the terms and provisions hereof; provided, however,
that EMC shall have the right to either (a) immediately assume the duties of
the Master Servicer or (b) select a successor Master Servicer; provided
further, however, that the Trustee shall have no obligation whatsoever with
respect to any liability (other than advances deemed recoverable and not
previously made) incurred by the Master Servicer at or prior to the time of
termination. As compensation therefor, but subject to Section 7.06, the
Trustee shall be entitled to compensation which the Master Servicer would
have been entitled to retain if the Master Servicer had continued to act
hereunder, except for those amounts due the Master Servicer as reimbursement
permitted under this Agreement for advances previously made or expenses
previously incurred. Notwithstanding the above, the Trustee may, if it shall
be unwilling so to act, or shall, if it is legally unable so to act, appoint
or petition a court of competent jurisdiction to appoint, any established
housing and home finance institution which is a Xxxxxx Mae- or Xxxxxxx
Mac-approved servicer, and with respect to a successor to the Master Servicer
only, having a net worth of not less than $10,000,000, as the successor to
the Master Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the Trustee shall obtain a letter from each Rating Agency that
the ratings, if any, on each of the Certificates will not be lowered as a
result of the selection of the successor to the Master Servicer. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on the Mortgage Loans as it
and such successor shall agree; provided, however, that the provisions of
Section 7.06 shall apply, the compensation shall not be in excess of that to
which the Master Servicer would have been entitled to if the Master Servicer
had continued to act hereunder, and that such successor shall undertake and
assume the obligations of the Trustee to pay compensation to any third Person
acting as an agent or independent contractor in the performance of master
servicing responsibilities hereunder. The Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting the Mortgage Loans as provided herein, it shall do so in a
separate capacity and not in its capacity as Trustee and, accordingly, the
provisions of Article IX shall be inapplicable to the Trustee in its duties
as the successor to the Master Servicer in the servicing of the Mortgage
Loans (although such provisions shall continue to apply to the Trustee in its
capacity as Trustee); the provisions of Article VII, however, shall apply to
it in its capacity as successor master servicer.
Section 8.03 Notification to Certificateholders. Upon any termination or
appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
Section 8.04 Waiver of Defaults. The Trustee shall transmit by mail to
all Certificateholders, within 60 days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Trustee, unless such
Event of Default shall have been cured, notice of each such Event of Default.
The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may, on behalf of all
Certificateholders, waive any default by the Master Servicer in the
performance of its obligations hereunder and the consequences thereof, except
a default in the making of or the causing to be made any required
distribution on the Certificates, which default may only be waived by Holders
of Certificates evidencing Fractional Undivided Interests aggregating 100% of
the Trust Fund. Upon any such waiver of a past default, such default shall be
deemed to cease to exist, and any Event of Default arising therefrom shall be
deemed to have been timely remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair any
right consequent thereon except to the extent expressly so waived. The
Trustee shall give notice of any such waiver to the Rating Agencies.
Section 8.05 List of Certificateholders. Upon written request of three
or more Certificateholders of record, for purposes of communicating with
other Certificateholders with respect to their rights under this Agreement,
the Trustee will afford such Certificateholders access during business hours
to the most recent list of Certificateholders held by the Trustee.
ARTICLE IX
Concerning the Trustee and the Securities Administrator
Section 9.01 Duties of Trustee. (a)The Trustee, prior to the occurrence
of an Event of Default and after the curing or waiver of all Events of
Default which may have occurred, and the Securities Administrator each
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee and the Securities
Administrator, respectively. If an Event of Default has occurred and has not
been cured or waived, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and subject to Section 8.02(b) use the
same degree of care and skill in their exercise, as a prudent person would
exercise under the circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically
required to be furnished to the Trustee and the Securities Administrator
pursuant to any provision of this Agreement, the Trustee and the Securities
Administrator, respectively, shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the
accuracy or content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished hereunder; provided,
further, that neither the Trustee nor the Securities Administrator shall be
responsible for the accuracy or verification of any calculation provided to
it pursuant to this Agreement.
(c) On each Distribution Date, the Trustee shall make monthly distributions
and the final distribution to the Certificateholders from funds in the
Distribution Account as provided in Sections 6.01 and 10.01 herein based
solely on the report of the Securities Administrator.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the curing or
waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee and the Securities Administrator
shall be determined solely by the express provisions of this Agreement,
neither the Trustee nor the Securities Administrator shall be liable
except for the performance of their respective duties and obligations
as are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Trustee or
the Securities Administrator and, in the absence of bad faith on the
part of the Trustee or the Securities Administrator, respectively, the
Trustee or the Securities Administrator, respectively, may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished
to the Trustee or the Securities Administrator, respectively, and
conforming to the requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be liable in
its individual capacity for an error of judgment made in good faith by
a Responsible Officer or Responsible Officers of the Trustee or an
officer of the Securities Administrator, respectively, unless it shall
be proved that the Trustee or the Securities Administrator,
respectively, was negligent in ascertaining the pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator shall be liable
with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the directions of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund, if such action or non-action relates
to the time, method and place of conducting any proceeding for any
remedy available to the Trustee or the Securities Administrator,
respectively, or exercising any trust or other power conferred upon the
Trustee or the Securities Administrator, respectively, under this
Agreement;
(iv) The Trustee shall not be required to take notice or be deemed to have
notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee's Corporate Trust Office shall have
actual knowledge thereof. In the absence of such notice, the Trustee
may conclusively assume there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless
it is determined by a court of competent jurisdiction that the
Trustee's gross negligence or willful misconduct was the primary cause
of such insufficiency (except to the extent that the Trustee is obligor
and has defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the
Trustee or the Securities Administrator, respectively, has been advised
of the likelihood of such loss or damage and regardless of the form of
action;
(vii) None of the Securities Administrator, the Depositor, the Master
Servicer, EMC or the Trustee shall be responsible for the acts or
omissions of the other, it being understood that this Agreement shall
not be construed to render them partners, joint venturers or agents of
one another; and
(viii) Neither the Trustee nor the Securities Administrator shall be
required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if there is reasonable ground
for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event
require the Trustee or the Securities Administrator to perform, or be
responsible for the manner of performance of, any of the obligations of
the Master Servicer under the Agreement, except during such time, if
any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in
accordance with the terms of this Agreement.
(e) All funds received by the Master Servicer and the Trustee and required
to be deposited in the Master Servicer Collection Account or the Distribution
Account, as the case may be, pursuant to this Agreement will be promptly so
deposited by the Master Servicer and the Trustee.
(f) Except for those actions that the Trustee or the Securities
Administrator is required to take hereunder, neither the Trustee nor the
Securities Administrator shall have any obligation or liability to take any
action or to refrain from taking any action hereunder in the absence of
written direction as provided hereunder.
Section 9.02 Certain Matters Affecting the Trustee and the Securities
Administrator. Except as otherwise provided in Section 9.01:
(a) The Trustee and the Securities Administrator may rely and shall be
protected in acting or refraining from acting in reliance on any resolution,
certificate of a Depositor, Master Servicer or Servicer, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) The Trustee and the Securities Administrator may consult with counsel
and any advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection with respect to any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(c) Neither the Trustee nor the Securities Administrator shall be under any
obligation to exercise any of the trusts or powers vested in it by this
Agreement, other than its obligation to give notices pursuant to this
Agreement, or to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby. Nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default of
which a Responsible Officer of the Trustee has actual knowledge (which has
not been cured or waived), subject to Section 8.02(b), to exercise such of
the rights and powers vested in it by this Agreement, and to use the same
degree of care and skill in their exercise, as a prudent person would
exercise under the circumstances in the conduct of his own affairs;
(d) Prior to the occurrence of an Event of Default hereunder and after the
curing or waiver of all Events of Default which may have occurred, neither
the Trustee nor the Securities Administrator shall be liable in its
individual capacity for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(e) Neither the Trustee nor the Securities Administrator shall be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless requested
in writing to do so by Holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 25% of the Trust Fund and
provided that the payment within a reasonable time to the Trustee or the
Securities Administrator, as applicable, of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee or the Securities Administrator, as
applicable, reasonably assured to the Trustee or the Securities
Administrator, as applicable, by the security afforded to it by the terms of
this Agreement. The Trustee or the Securities Administrator may require
reasonable indemnity against such expense or liability as a condition to
taking any such action. The reasonable expense of every such examination
shall be paid by the Certificateholders requesting the investigation;
(f) The Trustee and the Securities Administrator may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or
through Affiliates, agents or attorneys; provided, however, that the Trustee
may not appoint any agent to perform its custodial functions with respect to
the Mortgage Files or paying agent functions under this Agreement without the
express written consent of the Master Servicer, which consent will not be
unreasonably withheld. Neither the Trustee nor the Securities Administrator
shall be liable or responsible for the misconduct or negligence of any of the
Trustee's or the Securities Administrator's agents or attorneys or a
custodian or paying agent appointed hereunder by the Trustee or the
Securities Administrator with due care and, when required, with the consent
of the Master Servicer;
(g) Should the Trustee or the Securities Administrator deem the nature of
any action required on its part, other than a payment or transfer under
Section 4.01(b) or Section 4.02, to be unclear, the Trustee or the Securities
Administrator, respectively, may require prior to such action that it be
provided by the Depositor with reasonable further instructions;
(h) The right of the Trustee or the Securities Administrator to perform any
discretionary act enumerated in this Agreement shall not be construed as a
duty, and neither the Trustee nor the Securities Administrator shall be
accountable for other than its negligence or willful misconduct in the
performance of any such act;
(i) Neither the Trustee nor the Securities Administrator shall be required
to give any bond or surety with respect to the execution of the trust created
hereby or the powers granted hereunder, except as provided in Section 9.07;
and
(j) Neither the Trustee nor the Securities Administrator shall have any
duty to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Mortgage Loan by the Seller
pursuant to the Mortgage Loan Purchase Agreement or this Agreement, as
applicable, or the eligibility of any Mortgage Loan for purposes of this
Agreement.
Section 9.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates (other than the signature and countersignature of the Trustee on
the Certificates) shall be taken as the statements of the Depositor, and
neither the Trustee nor the Securities Administrator shall have any
responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representation as to the validity or sufficiency of
the Certificates (other than the signature and countersignature of the
Trustee on the Certificates) or of any Mortgage Loan except as expressly
provided in Sections 2.02 and 2.05 hereof; provided, however, that the
foregoing shall not relieve the Trustee of the obligation to review the
Mortgage Files pursuant to Sections 2.02 and 2.04. The Trustee's signature
and countersignature (or countersignature of its agent) on the Certificates
shall be solely in its capacity as Trustee and shall not constitute the
Certificates an obligation of the Trustee in any other capacity. Neither the
Trustee nor the Securities Administrator shall be accountable for the use or
application by the Depositor of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Depositor with respect to the Mortgage Loans. Subject to the provisions of
Section 2.05, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or
the validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and
priority, or for or with respect to the sufficiency of the Trust Fund or its
ability to generate the payments to be distributed to Certificateholders,
under this Agreement. Neither the Trustee nor the Securities Administrator
shall have any responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or
maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement other than any continuation statements
filed by the Trustee pursuant to Section 3.20.
Section 9.04 Trustee and Securities Administrator May Own Certificates.
The Trustee and the Securities Administrator in its individual capacity or in
any capacity other than as Trustee hereunder may become the owner or pledgee
of any Certificates with the same rights it would have if it were not Trustee
or the Securities Administrator, as applicable, and may otherwise deal with
the parties hereto.
Section 9.05 Trustee's and Securities Administrator's Fees and Expenses.
The fees and expenses of the Trustee and the Securities Administrator shall
be paid in accordance with a side letter agreement between the Trustee and
the Master Servicer. In addition, the Trustee and the Securities
Administrator will be entitled to recover from the Master Servicer Collection
Account pursuant to Section 4.03 all reasonable out-of-pocket expenses,
disbursements and advances and the expenses of the Trustee and the Securities
Administrator, respectively, in connection with any Event of Default, any
breach of this Agreement or any claim or legal action (including any pending
or threatened claim or legal action) incurred or made by the Trustee or the
Securities Administrator, respectively, in the administration of the trusts
hereunder (including the reasonable compensation, expenses and disbursements
of its counsel) except any such expense, disbursement or advance as may arise
from its negligence or intentional misconduct or which is the responsibility
of the Certificateholders. If funds in the Master Servicer Collection Account
are insufficient therefor, the Trustee and the Securities Administrator shall
recover such expenses from the Depositor. Such compensation and reimbursement
obligation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust.
Section 9.06 Eligibility Requirements for Trustee and Securities
Administrator. The Trustee and any successor Trustee and the Securities
Administrator and any successor Securities Administrator shall during the
entire duration of this Agreement be a state bank or trust company or a
national banking association organized and doing business under the laws of
such state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus and
undivided profits of at least $40,000,000 or, in the case of a successor
Trustee, $50,000,000, subject to supervision or examination by federal or
state authority and, in the case of the Trustee, rated "BBB" or higher by
Fitch with respect to their long-term rating and rated "BBB" or higher by
Standard & Poor's and "Baa2" or higher by Moody's with respect to any
outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee or successor Securities Administrator other than pursuant
to Section 9.10, rated in one of the two highest long-term debt categories
of, or otherwise acceptable to, each of the Rating Agencies. If the Trustee
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
the purposes of this Section 9.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital
and surplus) as set forth in its most recent report of condition so
published. In case at any time the Trustee or the Securities Administrator
shall cease to be eligible in accordance with the provisions of this Section
9.06, the Trustee or the Securities Administrator shall resign immediately in
the manner and with the effect specified in Section 9.08.
Section 9.07 Insurance. The Trustee and the Securities Administrator, at
their own expense, shall at all times maintain and keep in full force and
effect: (i) fidelity insurance, (ii) theft of documents insurance and (iii)
forgery insurance (which may be collectively satisfied by a "Financial
Institution Bond" and/or a "Bankers' Blanket Bond"). All such insurance shall
be in amounts, with standard coverage and subject to deductibles, as are
customary for insurance typically maintained by banks or their affiliates
which act as custodians for investor-owned mortgage pools. A certificate of
an officer of the Trustee or the Securities Administrator as to the Trustee's
or the Securities Administrator's, respectively, compliance with this Section
9.07 shall be furnished to any Certificateholder upon reasonable written
request.
Section 9.08 Resignation and Removal of the Trustee and Securities
Administrator. (a)The Trustee and the Securities Administrator may at any
time resign and be discharged from the Trust hereby created by giving written
notice thereof to the Depositor and the Master Servicer, with a copy to the
Rating Agencies. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee or successor Securities
Administrator, as applicable, by written instrument, in triplicate, one copy
of which instrument shall be delivered to each of the resigning Trustee or
Securities Administrator, as applicable, the successor Trustee or Securities
Administrator, as applicable. If no successor Trustee or Securities
Administrator shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee or Securities Administrator may petition any court of competent
jurisdiction for the appointment of a successor Trustee or Securities
Administrator.
(b) If at any time the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 9.06 and shall
fail to resign after written request therefor by the Depositor or if at any
time the Trustee or the Securities Administrator shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or the Securities Administrator, as applicable, or of its property
shall be appointed, or any public officer shall take charge or control of the
Trustee or the Securities Administrator, as applicable, or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Depositor shall promptly remove the Trustee, or shall be entitled to
remove the Securities Administrator, as applicable, and appoint a successor
Trustee or Securities Administrator, as applicable, by written instrument, in
triplicate, one copy of which instrument shall be delivered to each of the
Trustee or Securities Administrator, as applicable, so removed, the successor
Trustee or Securities Administrator, as applicable.
(c) The Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund may at any time remove the
Trustee or the Securities Administrator and appoint a successor Trustee or
Securities Administrator by written instrument or instruments, in
quadruplicate, signed by such Holders or their attorneys-in-fact duly
authorized, one complete set of which instruments shall be delivered to the
Depositor, the Master Servicer, the Securities Administrator (if the Trustee
is removed), the Trustee (if the Securities Administrator is removed), and
the Trustee or Securities Administrator so removed and the successor so
appointed. In the event that the Trustee or Securities Administrator is
removed by the Holders of Certificates in accordance with this Section
9.08(c), the Holders of such Certificates shall be responsible for paying any
compensation payable to a successor Trustee or successor Securities
Administrator, in excess of the amount paid to the predecessor Trustee or
predecessor Securities Administrator, as applicable.
(d) No resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities
Administrator pursuant to any of the provisions of this Section 9.08 shall
become effective except upon appointment of and acceptance of such
appointment by the successor Trustee or Securities Administrator as provided
in Section 9.09.
Section 9.09 Successor Trustee and Successor Securities Administrator.
(a)Any successor Trustee or Securities Administrator appointed as provided in
Section 9.08 shall execute, acknowledge and deliver to the Depositor and to
its predecessor Trustee or Securities Administrator an instrument accepting
such appointment hereunder. The resignation or removal of the predecessor
Trustee or Securities Administrator shall then become effective and such
successor Trustee or Securities Administrator, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties
and obligations of its predecessor hereunder, with like effect as if
originally named as Trustee or Securities Administrator herein. The
predecessor Trustee or Securities Administrator shall after payment of its
outstanding fees and expenses promptly deliver to the successor Trustee or
Securities Administrator, as applicable, all assets and records of the Trust
held by it hereunder, and the Depositor and the predecessor Trustee or
Securities Administrator, as applicable, shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Trustee or
Securities Administrator, as applicable, all such rights, powers, duties and
obligations.
(b) No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 9.09 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be
eligible under the provisions of Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee or Securities
Administrator as provided in this Section 9.09, the successor Trustee or
Securities Administrator shall mail notice of the succession of such Trustee
or Securities Administrator hereunder to all Certificateholders at their
addresses as shown in the Certificate Register and to the Rating Agencies.
EMC shall pay the cost of any mailing by the successor Trustee or Securities
Administrator.
Section 9.10 Merger or Consolidation of Trustee or Securities
Administrator. Any state bank or trust company or national banking
association into which the Trustee or the Securities Administrator may be
merged or converted or with which it may be consolidated or any state bank or
trust company or national banking association resulting from any merger,
conversion or consolidation to which the Trustee or the Securities
Administrator, respectively, shall be a party, or any state bank or trust
company or national banking association succeeding to all or substantially
all of the corporate trust business of the Trustee or the Securities
Administrator, respectively, shall be the successor of the Trustee or the
Securities Administrator, respectively, hereunder, provided such state bank
or trust company or national banking association shall be eligible under the
provisions of Section 9.06. Such succession shall be valid without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 9.11 Appointment of Co-Trustee or Separate Trustee.
(a)Notwithstanding any other provisions hereof, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of
the Trust or property constituting the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved
by the Trustee and the Depositor to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any
part of the Trust, and to vest in such Person or Persons, in such capacity,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section 9.11, such powers, duties, obligations, rights and
trusts as the Depositor and the Trustee may consider necessary or desirable.
(b) If the Depositor shall not have joined in such appointment within 15
days after the receipt by it of a written request so to do, the Trustee shall
have the power to make such appointment without the Depositor.
(c) No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor Trustee under Section 9.06 hereunder
and no notice to Certificateholders of the appointment of co-trustee(s) or
separate trustee(s) shall be required under Section 9.08 hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by
the Trustee and such separate trustee or co-trustee jointly, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Trustee hereunder or as successor to the
Master Servicer hereunder), the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article IX. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee.
(f) To the extent not prohibited by law, any separate trustee or co-trustee
may, at any time, request the Trustee, its agent or attorney-in-fact, with
full power and authority, to do any lawful act under or with respect to this
Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by reason of
any act or omission of another trustee under this Agreement. The Depositor
and the Trustee acting jointly may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Section 9.12 Federal Information Returns and Reports to
Certificateholders; REMIC Administration. (a)For federal income tax purposes,
the taxable year of each 2004-10 REMIC shall be a calendar year and the
Securities Administrator shall maintain or cause the maintenance of the books
of each such 2004-10 REMIC on the accrual method of accounting.
(b) The Securities Administrator shall prepare and file or cause to be
filed with the Internal Revenue Service, and the Trustee shall sign, Federal
tax information returns or elections required to be made hereunder with
respect to each 2004-10 REMIC, the Trust Fund, if applicable, and the
Certificates containing such information and at the times and in the manner
as may be required by the Code or applicable Treasury regulations, and shall
furnish to each Holder of Certificates at any time during the calendar year
for which such returns or reports are made such statements or information at
the times and in the manner as may be required thereby, including, without
limitation, reports relating to mortgaged property that is abandoned or
foreclosed, receipt of mortgage interests in kind in a trade or business, a
cancellation of indebtedness, interest, original issue discount and market
discount or premium (using a constant prepayment assumption of 25% CPR). The
Securities Administrator will apply for an Employee Identification Number
from the IRS under Form SS-4 or any other acceptable method for all tax
entities. In connection with the foregoing, the Securities Administrator
shall timely prepare and file, and the Trustee shall sign, IRS Form 8811,
which shall provide the name and address of the person who can be contacted
to obtain information required to be reported to the holders of regular
interests in each 2004-10 REMIC (the "REMIC Reporting Agent"). The Trustee
shall make elections to treat each 2004-10 REMIC as a REMIC (which elections
shall apply to the taxable period ending December 31, 2003 and each calendar
year thereafter) in such manner as the Code or applicable Treasury
regulations may prescribe, and as described by the Securities Administrator.
The Trustee shall sign all tax information returns filed pursuant to this
Section and any other returns as may be required by the Code. The Holder of
the largest percentage interest in the Class R-I Certificate is hereby
designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
''1.860F-4(d)) for REMIC I, the Holder of the largest percentage interest in
the Class R-II Certificate is hereby designated as the "Tax Matters Person"
for REMIC II and the Holder of the largest percentage interest in the Class
R-III Certificate is hereby designated as the "Tax Matters Person" for REMIC
III. The Securities Administrator is hereby designated and appointed as the
agent of each such Tax Matters Person. Any Holder of a Residual Certificate
will by acceptance thereof appoint the Securities Administrator as agent and
attorney-in-fact for the purpose of acting as Tax Matters Person for each
2004-10 REMIC during such time as the Securities Administrator does not own
any such Residual Certificate. In the event that the Code or applicable
Treasury regulations prohibit the Trustee from signing tax or information
returns or other statements, or the Securities Administrator from acting as
agent for the Tax Matters Person, the Trustee and the Securities
Administrator shall take whatever action that in its sole good faith judgment
is necessary for the proper filing of such information returns or for the
provision of a tax matters person, including designation of the Holder of the
largest percentage interest in a Residual Certificate to sign such returns or
act as tax matters person. Each Holder of a Residual Certificate shall be
bound by this Section.
(c) The Securities Administrator shall provide upon request and receipt of
reasonable compensation, such information as required in Section
860D(a)(6)(B) of the Code to the Internal Revenue Service, to any Person
purporting to transfer a Residual Certificate to a Person other than a
transferee permitted by Section 5.05(b), and to any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee
holding an interest in a pass-through entity described in Section 860E(e)(6)
of the Code, any record holder of which is not a transferee permitted by
Section 5.05(b) (or which is deemed by statute to be an entity with a
disqualified member).
(d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, any state income tax returns required
under Applicable State Law with respect to each REMIC or the Trust Fund.
(e) Notwithstanding any other provision of this Agreement, the Trustee and
the Securities Administrator shall comply with all federal withholding
requirements respecting payments to Certificateholders of interest or
original issue discount on the Mortgage Loans, that the Trustee or the
Securities Administrator reasonably believes are applicable under the Code.
The consent of Certificateholders shall not be required for such withholding.
In the event the Trustee or the Securities Administrator withholds any amount
from interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Trustee
or the Securities Administrator shall, together with its monthly report to
such Certificateholders, indicate such amount withheld.
(f) The Trustee and the Securities Administrator agree to indemnify the
Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants and the Securities Administrator's covenants,
respectively, set forth in this Section 9.12; provided, however, such
liability and obligation to indemnify in this paragraph shall not be joint
and several and neither the Trustee nor the Securities Administrator shall be
liable or be obligated to indemnify the Trust Fund for the failure by the
other to perform any duty under this Agreement or the breach by the other of
any covenant in this Agreement.
ARTICLE X
Termination
Xxxxxxx 00.00 Xxxxxxxxxxx Xxxx Xxxxxxxxxx by EMC or its Designee or
Liquidation of the Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and
responsibilities of the Depositor, the Trustee, the Master Servicer and the
Securities Administrator created hereby, other than the obligation of the
Trustee to make payments to Certificateholders as hereinafter set forth shall
terminate upon:
(i) the repurchase by or at the direction of EMC or its designee of all
Mortgage Loans and all related REO Property remaining in the Trust at a
price (the "Termination Purchase Price") equal to the sum of (a) 100%
of the Outstanding Principal Balance of each Mortgage Loan (other than
a Mortgage Loan related to REO Property) as of the date of repurchase,
net of the principal portion of any unreimbursed Monthly Advances made
by the purchaser, together with interest at the applicable Mortgage
Interest Rate accrued but unpaid to, but not including, the first day
of the month of repurchase, (b) the appraised value of any related REO
Property, less the good faith estimate of the Depositor of liquidation
expenses to be incurred in connection with its disposal thereof (but
not more than the Outstanding Principal Balance of the related Mortgage
Loan, together with interest at the applicable Mortgage Interest Rate
accrued on that balance but unpaid to, but not including, the first day
of the month of repurchase), such appraisal to be calculated by an
appraiser mutually agreed upon by the Depositor and the Trustee at the
expense of EMC, (c) unreimbursed out-of pocket costs of the Master
Servicer, including unreimbursed servicing advances and the principal
portion of any unreimbursed Monthly Advances, made on the Mortgage
Loans prior to the exercise of such repurchase right and (d) any
unreimbursed costs and expenses of the Trustee and the Securities
Administrator payable pursuant to Section 9.05;
(ii) the later of the making of the final payment or other liquidation, or
any advance with respect thereto, of the last Mortgage Loan remaining
in the Trust Fund or the disposition of all property acquired with
respect to any Mortgage Loan; provided, however, that in the event that
an advance has been made, but not yet recovered, at the time of such
termination, the Person having made such advance shall be entitled to
receive, notwithstanding such termination, any payments received
subsequent thereto with respect to which such advance was made; or
(iii) the payment to Certificateholders of all amounts required to be paid to
them pursuant to this Agreement.
(b) In no event, however, shall the Trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
(c) The right of EMC or its designee to repurchase all the assets of the
Trust Fund described in Section 10.01(a)(i) above shall be exercisable only
if (i) the aggregate Stated Principal Balance of the Mortgage Loans at the
time of any such repurchase is less than 20% of the Cut-off Date Balance or
(ii) the Depositor, based upon an Opinion of Counsel, has determined that the
REMIC status of any 2004-10 REMIC has been lost or that a substantial risk
exists that such REMIC status will be lost for the then-current taxable year.
At any time thereafter, in the case of (i) or (ii) above, the Depositor may
elect to terminate any 2004-10 REMIC at any time, and upon such election, the
Depositor or its designee, shall purchase in accordance with Section
10.01(a)(i) above all the assets of the Trust Fund.
(d) The Trustee shall give notice of any termination to the
Certificateholders, with a copy to the Master Servicer, the Securities
Administrator and the Rating Agencies, upon which the Certificateholders
shall surrender their Certificates to the Trustee for payment of the final
distribution and cancellation. Such notice shall be given by letter, mailed
not earlier than the l5th day and not later than the 25th day of the month
next preceding the month of such final distribution, and shall specify (i)
the Distribution Date upon which final payment of the Certificates will be
made upon presentation and surrender of the Certificates at the office of the
Trustee therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such Distribution Date is
not applicable, payments being made only upon presentation and surrender of
the Certificates at the office of the Trustee therein specified.
(e) If the option of EMC to repurchase or cause the repurchase of all
assets of the Trust Fund described in Section 10.01(a)(i) above is exercised,
EMC and/or its designee shall deliver to the Trustee for deposit in the
Distribution Account, by the Business Day prior to the applicable
Distribution Date, an amount equal to the Termination Purchase Price. Upon
presentation and surrender of the Certificates by the Certificateholders, the
Trustee shall distribute to the Certificateholders an amount determined as
follows: with respect to each Certificate (other than the Class R
Certificates), the outstanding Certificate Principal Balance, plus with
respect to each Certificate (other than the Class R Certificates), one
month's interest thereon at the applicable Pass-Through Rate; and with
respect to the Class R Certificates, the percentage interest evidenced
thereby multiplied by the difference, if any, between the above described
repurchase price and the aggregate amount to be distributed to the Holders of
the Certificates (other than the Class R Certificates). If the proceeds with
respect to the Mortgage Loans are not sufficient to pay all of the Senior
Certificates in full, any such deficiency will be allocated first, to the
Subordinate Certificates, in inverse order of their numerical designation,
and then to the Senior Certificates. Upon deposit of the required repurchase
price and following such final Distribution Date, the Trustee shall release
promptly to EMC and/or its designee the Mortgage Files for the remaining
applicable Mortgage Loans, and the Accounts with respect thereto shall
terminate, subject to the Trustee's obligation to hold any amounts payable to
Certificateholders in trust without interest pending final distributions
pursuant to Section 10.01(g). Any other amounts remaining in the Accounts
will belong to EMC.
(f) In the event that this Agreement is terminated by reason of the payment
or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Section 10.01(a)(ii) above,
the Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account all distributable amounts remaining in the Master
Servicer Collection Account. Upon the presentation and surrender of the
Certificates, the Trustee shall distribute to the remaining
Certificateholders, pursuant to the written direction of the Securities
Administrator and in accordance with their respective interests, all
distributable amounts remaining in the Distribution Account. Upon deposit by
the Master Servicer of such distributable amounts, and following such final
Distribution Date, the Trustee shall release promptly to EMC or its designee
the Mortgage Files for the remaining Mortgage Loans, and the Master Servicer
Collection Account and the Distribution Account shall terminate, subject to
the Trustee's obligation to hold any amounts payable to the
Certificateholders in trust without interest pending final distributions
pursuant to this Section 10.01(f).
(g) If not all of the Certificateholders shall surrender their Certificates
for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates
for cancellation and receive the final distribution with respect thereto. If
within six months after the second notice, not all the Certificates shall
have been surrendered for cancellation, the Trustee may take appropriate
steps, or appoint any agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets which remain
subject to this Agreement.
Section 10.02 Additional Termination Requirements. (a)If the option of
EMC to repurchase all the Mortgage Loans under Section 10.01(a)(i) above is
exercised, the Trust Fund and each 2004-10 REMIC shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been furnished with an Opinion of Counsel addressed to the Trustee to the
effect that the failure of the Trust to comply with the requirements of this
Section 10.02 will not (i) result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code on each 2004-10 REMIC or
(ii) cause any 2004-10 REMIC to fail to qualify as a 2004-10 REMIC at any
time that any Regular Interests are outstanding:
(i) within 90 days prior to the final Distribution Date, at the written
direction of EMC, the Trustee, as agent for the respective Tax Matters
Persons, shall adopt a plan of complete liquidation of each 2004-10
REMIC the case of a termination under Section 10.01(a)(i). Such plan,
which shall be provided to the Trustee by EMC, shall meet the
requirements of a "qualified liquidation" under Section 860F of the
Code and any regulations thereunder.
(ii) EMC shall notify the Trustee at the commencement of such 90-day
liquidation period and, at or prior to the time of making of the final
payment on the Certificates, the Trustee shall sell or otherwise
dispose of all of the remaining assets of the Trust Fund in accordance
with the terms hereof; and
(iii) at or after the time of adoption of such a plan of complete liquidation
of any 2004-10 REMIC and at or prior to the final Distribution Date,
the Trustee shall sell for cash all of the assets of the Trust to or at
the direction of EMC, and each 2004-10 REMIC, shall terminate at such
time.
(b) By their acceptance of the Residual Certificates, the Holders thereof
hereby (i) agree to adopt such a plan of complete liquidation of the related
2004-10 REMIC upon the written request of EMC, and to take such action in
connection therewith as may be reasonably requested by the Depositor and (ii)
appoint EMC as their attorney-in-fact, with full power of substitution, for
purposes of adopting such a plan of complete liquidation. The Trustee shall
adopt such plan of liquidation by filing the appropriate statement on the
final tax return of each 2004-10 REMIC. Upon complete liquidation or final
distribution of all of the assets of the Trust Fund, the Trust Fund and each
2004-10 REMIC shall terminate.
ARTICLE XI
Miscellaneous Provisions
Section 11.01 Intent of Parties. The parties intend that each 2004-10
REMIC shall be treated as a REMIC for federal income tax purposes and that
the provisions of this Agreement should be construed in furtherance of this
intent. Notwithstanding any other express or implied agreement to the
contrary, the Depositor, the Master Servicer, the Securities Administrator,
EMC, the Trustee, each recipient of the related Prospectus Supplement and, by
its acceptance thereof, each holder of a Certificate, agrees and acknowledges
that each party hereto has agreed that each of them and their employees,
representatives and other agents may disclose, immediately upon commencement
of discussions, to any and all persons the tax treatment and tax structure of
the Certificates and the 2004-10 REMICs, the transactions described herein
and all materials of any kind (including opinions and other tax analyses)
that are provided to any of them relating to such tax treatment and tax
structure except where confidentiality is reasonably necessary to comply with
the securities laws of any applicable jurisdiction. For purposes of this
paragraph, the terms "tax treatment" and "tax structure" have the meanings
set forth in Treasury Regulation Sections 1.6011-4(c), 301.6111-2(c) and
301.6112-1(d).
Section 11.02 Amendment. (a) This Agreement may be amended from time to
time by the Company, the Depositor, the Master Servicer, the Securities
Administrator and the Trustee, without notice to or the consent of any of the
Certificateholders, to (i) cure any ambiguity, (ii) correct or supplement any
provisions herein that may be defective or inconsistent with any other
provisions herein, (iii) conform any provisions herein to the provisions in
the Prospectus, (iv) comply with any changes in the Code or (v) make any
other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this
Agreement; provided, however, that with respect to clauses (iv) and (v) of
this Section 11.02(a), such action shall not, as evidenced by an Opinion of
Independent Counsel, addressed to the Trustee, adversely affect in any
material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by the Company,
the Master Servicer, the Depositor, the Securities Administrator and the
Trustee, with the consent of the Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust
Fund or of the applicable Class or Classes, if such amendment affects only
such Class or Classes, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Certificateholders; provided,
however, that no such amendment shall (i) reduce in any manner the amount of,
or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the
Holder of such Certificate, (ii) reduce the aforesaid percentage of
Certificates the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all Certificates then
outstanding, or (iii) cause any 2004-10 REMIC to fail to qualify as a REMIC
for federal income tax purposes, as evidenced by an Opinion of Independent
Counsel addressed to the Trustee which shall be provided to the Trustee other
than at the Trustee's expense. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.02(b), Certificates registered in the name of or held for the
benefit of the Depositor, the Securities Administrator, the Master Servicer,
or the Trustee or any Affiliate thereof shall be entitled to vote their
Fractional Undivided Interests with respect to matters affecting such
Certificates.
(c) Promptly after the execution of any such amendment, the Trustee shall
furnish a copy of such amendment or written notification of the substance of
such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Section 11.02(b) above, it shall not
be necessary for the Certificateholders to approve the particular form of
such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as the
Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel addressed to
the Trustee stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee and the Securities Administrator
may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's or the Securities Administrator's own respective
rights, duties or immunities under this Agreement.
Section 11.03 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the Mortgaged Properties are
situated, and in any other appropriate public recording office or elsewhere.
The Depositor shall effect such recordation, at the expense of the Trust upon
the request in writing of a Certificateholder, but only if such direction is
accompanied by an Opinion of Counsel (provided at the expense of the
Certificateholder requesting recordation) to the effect that such recordation
would materially and beneficially affect the interests of the
Certificateholders or is required by law.
Section 11.04 Limitation on Rights of Certificateholders. (a)The death or
incapacity of any Certificateholder shall not terminate this Agreement or the
Trust, nor entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of the Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no Certificateholders
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of
any action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at
law upon, under or with respect to this Agreement against the Depositor, the
Master Servicer, the Securities Administrator or any successor to any such
parties unless (i) such Certificateholder previously shall have given to the
Trustee a written notice of a continuing default, as herein provided, (ii)
the Holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 51% of the Trust Fund shall have made written
request upon the Trustee to institute such action, suit or proceeding in its
own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs and expenses and
liabilities to be incurred therein or thereby, and (iii) the Trustee, for 60
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue of any
provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this
Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 11.04, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.05 Acts of Certificateholders. (a)Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in
and evidenced by one or more instruments of substantially similar tenor
signed by such Certificateholders in person or by an agent duly appointed in
writing. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is expressly required, to the Depositor. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and conclusive in favor
of the Trustee and the Depositor, if made in the manner provided in this
Section 11.05.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or
by a certificate of a notary public or other officer authorized by law to
take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his or her authority. The fact and date of the execution
of any such instrument or writing, or the authority of the individual
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance
with Section 5.04) shall be proved by the Certificate Register, and neither
the Trustee, the Securities Administrator, the Depositor, the Master Servicer
nor any successor to any such parties shall be affected by any notice to the
contrary.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action of the holder of any Certificate shall bind every future
holder of the same Certificate and the holder of every Certificate issued
upon the registration of transfer or exchange thereof, if applicable, or in
lieu thereof with respect to anything done, omitted or suffered to be done by
the Trustee, the Securities Administrator, the Depositor, the Master Servicer
or any successor to any such party in reliance thereon, whether or not
notation of such action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Certificates owned by the Trustee, the Securities Administrator,
the Depositor, the Master Servicer or any Affiliate thereof shall be
disregarded, except as otherwise provided in Section 11.02(b) and except
that, in determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or
waiver, only Certificates which the Trustee knows to be so owned shall be so
disregarded. Certificates which have been pledged in good faith to the
Trustee, the Securities Administrator, the Depositor, the Master Servicer or
any Affiliate thereof may be regarded as outstanding if the pledgor
establishes to the satisfaction of the Trustee the pledgor's right to act
with respect to such Certificates and that the pledgor is not an Affiliate of
the Trustee, the Securities Administrator, the Depositor or the Master
Servicer, as the case may be.
Section 11.06 Governing Law. THIS AGREEMENT AND THE CERTIFICATES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER) AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 11.07 Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at (including delivery by
facsimile) or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, to (i) in the case of the
Depositor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Vice
President-Servicing, telecopier number: (000) 000-0000, or to such other
address as may hereafter be furnished to the other parties hereto in writing;
(ii) in the case of the Trustee, at its Corporate Trust Office, or such other
address as may hereafter be furnished to the other parties hereto in writing;
(iii) in the case of EMC, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Vice President-Servicing, telecopier number: (000) 000-0000, or to
such other address as may hereafter be furnished to the other parties hereto
in writing; (iv) in the case of the Master Servicer or Securities
Administrator, Xxxxx Fargo Bank, National Association, X.X. Xxx 00, Xxxxxxxx
Xxxxxxxx 00000 (or, in the case of overnight deliveries, 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000) (Attention: XXXXXX 0000-00), xxxxxxxxx no.:
(000) 000-0000, or such other address as may hereafter be furnished to the
other parties hereto in writing; or (v) in the case of the Rating Agencies,
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
and Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000. Any notice delivered to the
Depositor, the Master Servicer, the Securities Administrator or the Trustee
under this Agreement shall be effective only upon receipt. Any notice
required or permitted to be mailed to a Certificateholder, unless otherwise
provided herein, shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice.
Section 11.08 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severed from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the holders thereof.
Section 11.09 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors
and assigns of the parties hereto.
Section 11.10 Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
Section 11.11 Counterparts. This Agreement may be executed in two or more
counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same
instrument.
Section 11.12 Notice to Rating Agencies. The article and section headings
herein are for convenience of reference only, and shall not limited or
otherwise affect the meaning hereof. The Trustee shall promptly provide
notice to each Rating Agency with respect to each of the following of which a
Responsible Officer of the Trustee has actual knowledge:
1. Any material change or amendment to this Agreement or the
Servicing Agreements;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer, the
Trustee or the Securities Administrator;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Master Servicer Collection
Account or the Distribution Account.
128
IN WITNESS WHEREOF, the Depositor, the Trustee, EMC, the Master
Servicer and the Securities Administrator have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., as Depositor
By: /s/ Xxxxx Xxxxxxxxxxx
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, as Trustee
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Trust Officer
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Master Servicer
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Securities
Administrator
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
EMC MORTGAGE CORPORATION
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Executive Vice President
Accepted and Agreed as to
Sections 2.01, 2.02, 2.03, 2.04 and 9.09(c)
in its capacity as Seller
EMC MORTGAGE CORPORATION
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Executive Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of August, 2004 before me, a notary public in and for
said State, personally appeared Xxxxx Xxxxxxxxxxx, known to me to be a Vice
President of Structured Asset Mortgage Investments II Inc., the corporation
that executed the within instrument, and also known to me to be the person
who executed it on behalf of said corporation, and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal] /s/ Xxxxxxxx Xxxxxxxx
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of August, 2004 before me, a notary public in and for
said State, personally appeared Xxxxx X. Xxxxxxx, known to me to be a Trust
Officer of JPMorgan Chase Bank, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf
of said corporation, and acknowledged to me that such corporation executed
the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal] /s/ Xxxxxx Xxxxxxx
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 31st day of August, 2004 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxx, known to me to be an Assistant
Vice President of Xxxxx Fargo Bank, National Association, the corporation
that executed the within instrument, and also known to me to be the person
who executed it on behalf of said corporation, and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal] /s/ Xxxxx X. Xxxxxx
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXX )
On the 31st day of August, 2004 before me, a notary public in and for
said State, personally appeared Xxxxxx Xxxxxx, known to me to be an Assistant
Vice President of Xxxxx Fargo Bank, National Association, the corporation
that executed the within instrument, and also known to me to be the person
who executed it on behalf of said corporation, and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal] /s/ Xxxxx X. Xxxxxx
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
On the 31st day of August, 2004 before me, a notary public in and for
said State, personally appeared Xxx Xxxxxxxx, known to me to be an Executive
Vice President of EMC Mortgage Corporation, the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal] /s/ Xxxxxxx Xxxxxx
Appendix 1
CALCULATION OF REMIC I Y PRINCIPAL REDUCTION AMOUNTS
REMIC I Y Principal Reduction Amounts: For any Distribution Date the amounts
by which the principal balances of the REMIC I Y-1 and REMIC I Y-2 Regualar
Interests respectively will be reduced on such distribution date by the allocation
of Realized Losses and the distribution of principal, determined as follows:
First for each of Loan Group I and Loan Group II determine the weighted average
pass-through rate for that Loan Group for distributions of interest that will be
made on the next succeeding Distribution Date (the "Group Interest Rate").
The Principal Reduction Amount for each of the REMIC I Regular Interests will be
determined pursuant to the "Generic solution for the REMIC I Y Principal
Reduction Amounts" set forth below (the "Generic Solution") by making
identifications among the actual Groups and their related REMIC I Y and REMIC I Z
Regular Interests and weighted average pass-through rates and the Loan Groups named
in the Generic Solution and their related REMIC I Y and REMIC I Z Regular Interests as
follows:
A. Determine which Loan Group has the lower Group Interest Rate. That Loan Group will
be identified with Group AA and the REMIC I Y and REMIC I Z Regular Interests related
to that Loan Group will be respectively identified with the REMIC I YAA and
REMIC I ZAA Regular Interests. The Group Interest Rate for that Loan Group will be
identified with J%. If the two Loan Groups have the same Group Interest Rate pick
one for this purpose, subject to the restriction that each Loan Group may be
picked only once in the course of any such selections pursuant to paragraphs
A and B of this definition.
B. Determine which Loan Group has the higher Group Interest Rate. That Loan Group will
be identified with Group BB and the REMIC I Y and REMIC I Z Regular Interests related
to that Loan Group will be respectively identified with the REMIC I BB and REMIC I ZBB
Regular Interests. The Group Interest Rate for that Loan Group will be identified with
K%. If the two Loan Groups have the same Group Interest Rate the Loan Group not
selected pursuant to paragraph A, above, will be selected for purposes of this paragraph B.
Second, apply the Generic Solution set forth below to determine the REMIC I Y
Principal Reduction Amounts for the Distribution Date using the
identifications made above.
Generic Solution for the REMIC I Y Principal Reduction Amounts: For any
Distribution Date, the amounts by which the principal balances of the REMIC I
YAA and REMIC I YBB Regular Interests respectively will be reduced on such
Distribution Date by the allocation of Realized Losses and the distribution
of principal, determined as follows:
J% and K% represent the interest rates on Loan Group AA and Loan Group BB
respectively. J%<K%.
For purposes of the succeeding formulas the following symbols shall have the
meanings set forth below:
PJB = the Group AA Subordinate Balance after the allocation of Realized
Losses and distributions of principal on such Distribution Date.
PKB = the Group BB Subordinate Balance after the allocation of Realized
Losses and distributions of principal on such Distribution Date.
R = the Class CB Pass Through Rate = (J%PJB + K%PKB)/(PJB + PKB)
Yj = the REMIC I YAA Principal Balance after distributions on the prior
Distribution Date.
Yk = the REMIC I YBB Principal Balance after distributions on the prior
Distribution Date.
ΔYj = the REMIC I YAA Principal Reduction Amount.
ΔYk = the REMIC I YBB Principal Reduction Amount.
Zj = the REMIC I ZAA Principal Balance after distributions on the prior
Distribution Date.
Zk = the REMIC I ZBB Principal Balance after distributions on the prior
Distribution Date.
ΔZj = the REMIC I ZAA Principal Reduction Amount.
ΔZk = the REMIC I ZBB Principal Reduction Amount.
Pj = the aggregate Uncertificated Principal Balance of the REMIC I YAA and REMIC I ZAA
Regular Interests after distributions on the prior Distribution Date,
which is equal to the aggregate principal balance of the Mortgage Loans in Loan Group AA
reduced by the Group AA Class P principal balance, if any, and the
Class R Principal Balance, if applicable.
Pk = the aggregate Uncertificated Principal Balance of the REMIC I YBB and REMIC I ZBB
Regular Interests after distributions on the prior Distribution Date,
which is equal to the aggregate principal balance of the Mortgage Loans in Loan Group BB
reduced by the Group BB Class P principal balance, if any and Class R
Principal Balance, if applicable.
ΔPj = the aggregate principal reduction resulting on such Distribution
Date on the Mortgage Loans in Loan Group AA as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (c)(i) or
(c)(ii) of the definition of REMIC I Distribution Amount) to be made
and realized losses to be allocated on such Distribution Date, reduced
by the portion, if any, of such reduction allocable to any Group AA
Class P Certificates or the Class R Certificates, if applicable, which
is equal to the aggregate of the REMIC I YAA and REMIC I ZAA Principal
Reduction Amounts.
ΔPk= the aggregate principal reduction resulting on such Distribution
Date on the Mortgage Loans in Loan Group BB as a result of principal distributions
(exclusive of any amounts distributed pursuant to clauses (c)(i) or
(c)(ii) of the definition of REMIC I Distribution Amount) to be made
and realized losses to be allocated on such Distribution Date, reduced
by the portion, if any, of such reduction allocable to any Group BB
Class P Certificates or the Class R Certificates, if applicable, which
is equal to the aggregate of the REMIC I YBB and REMIC I ZBB Principal
Reduction Amounts.
α = .0005
γ = (R - J%)/(K% - R). γ is a non-negative number unless its
denominator is zero, in which event it is undefined.
If γ is zero, ΔYk = Yk and ΔYj = (Yj/Pj)ΔPj.
If γ is undefined, ΔYj = Yj, ΔYk = (Yk/Pk)ΔPk.
In the remaining situations, ΔYk and ΔYj shall be defined as
follows:
1. If Yk - α(Pk - ΔPk) => 0, Yj- α(Pj - ΔPj) => 0,
and γ (Pj - ΔPj) < (Pk - ΔPk),
ΔYk = Yk - αγ (Pj - ΔPj) and
ΔYj = Yj - α(Pj - ΔPj).
2. If Yk - α(Pk - ΔPk) => 0, Yj - α(Pj - ΔPj) =>
0, and γ (Pj - ΔPj) => (Pk - ΔPk),
ΔYk = Yk - α(Pk - ΔPk) and
ΔYj = Yj - (α/γ)(Pk - ΔPk).
3. If Yk - α(Pk - ΔPk) < 0, Yj - α(Pj - ΔPj) => 0,
and Yj - α(Pj - ΔPj) => Yj - (Yk/γ),
ΔYk = Yk - αγ (Pj - ΔPj) and
ΔYj = Yj - α(Pj - ΔPj).
4. If Yk - α(Pk - ΔPk) < 0, Yj - (Yk/γ) => 0, and
Yj - α(Pj - ΔPj) <= Yj - (Yk/γ), ΔYk = 0 and
ΔYj = Yj - (Yk/γ).
5. If Yj - α(Pj - ΔPj) < 0, Yj - (Yk/γ) < 0, and
Yk - α(Pk - ΔPk) <= Yk - (γYj),
ΔYk = Yk - (γYj) and ΔYj = 0.
6. If Yj - α(Pj - ΔPj) < 0, Yk - α(Pk - ΔPk) => 0,
and Yk - α(Pk - ΔPk) => Yk - (γYj),
ΔYk = Yk - α(Pk - ΔPk) and
ΔYj = Yj - (α/γ)(Pk - ΔPk).
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the REMIC I Y and
REMIC I Z Principal Distribution Amounts is to accomplish the following goals
in the following order of priority:
1. Making the ratio of Yk to Yj equal to γ after taking account of
the allocation Realized Losses and the distributions that will be made
through end of the Distribution Date to which such provisions relate
and assuring that the Principal Reduction Amount for each of the REMIC I
YAA, REMIC I YBB, REMIC I ZAA and REMIC I ZBB Regular Interests is greater than or
equal to zero for such Distribution Date;
2. Making (i) the REMIC I YAA Uncertificated Principal Balance less than or equal to
0.0005 of the sum of the REMIC I YAA and REMIC I ZAA Uncertificated Principal
Balances and (ii) the REMIC I YBB Uncertificated Principal Balance less than or equal to 0.0005 of
the sum of the REMIC I YBB and REMIC I ZBB Principal Balances in each case after
giving effect to allocations of Realized Losses and distributions to be
made through the end of the Distribution Date to which such provisions
relate; and
3. Making the larger of (a) the fraction whose numerator is Yk and whose
denominator is the sum of Yk and Zk and (b) the fraction whose
numerator is Yj and whose denominator is the sum of Yj, and Zj as large
as possible while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of
REMIC I Y Principal Reduction Amount to accomplish both of goals 1 and 2 above,
the amounts thereof should be adjusted to so as to accomplish such goals
within the requirement that each REMIC I Y Principal Reduction Amount must be
less than or equal to the sum of (a) the Principal Realized Losses to be
allocated on the related Distribution Date for the related Pool remaining
after the allocation of such Realized Losses to the related Class P
Certificates and (b) the remainder of the Available Distribution Amount for
the related Pool or after reduction thereof by the distributions to be made
on such Distribution Date (i) to the related Class P Certificates, (ii) to
the related Class X Certificates and (iii) in respect of interest on the
related REMIC I Y and REMIC I Z Certificates, or, if both of such goals cannot be
accomplished within such requirement, such adjustment as is necessary shall
be made to accomplish goal 1 within such requirement. In the event of any
conflict among the provisions of the definition of the REMIC I Y Principal
Reduction Amounts, such conflict shall be resolved on the basis of the goals
and their priorities set forth above within the requirement set forth in the
preceding sentence.
Method of calculating initial balance of the REMIC I Y and REMIC I Z Regular Interests:
To calculate the initial balances for the REMIC I YAA, REMIC I YBB,
REMIC I ZAA and REMIC I ZBB Regular Interests, first calculate the Group AA and Group
BB Subordinate Amounts as of the Cut Off Date. Then calculate R according to
the definition above. Calculate γ according to the definition above.
Calculate Pj and Pk as the Group AA Initial Balance reduced by the Class AA-P
Initial Balance and the Class R-1 Initial Balance (if applicable) and the
Group BB Initial Balance reduced by the Class BB-P Initial Balance and the
Class R-1 Initial Balance (if applicable), respectively.
If 0.0005 γ Pj <= 0.0005 Pk, Yj = 0.0005 Pj and
Yk = 0.0005 γ Pj .
If 0.0005 x Xx x 0.0000 Xx, Xx x 0.0000 Xx,
Xx = 0.0005 Pk /γ .
Then Zj = Xx - Xx and Zk = Pk - Yk.
